Taking over another business

Cleanworks

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Oct 22, 2012
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New Westminster,BC
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Ron Marriott
Just got an interesting phone call from a owner/operator business in a neighboring community who wants me to take over his business on a commission basis. Outside of my regular territory. Would probably have to hire someone to do the work. May have one person available. Can provide lots of support. Suggest commission is 70% for me and they provide someone to answer phone and schedule. They charge my rates and a little more. Any advice?
 
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Cleanworks

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New Westminster,BC
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Ron Marriott
Who pays the power bill?
They pay their receptionist and I pay all other expenses. May be an opportunity for an outright buyout. Not sure what kind or condition their truck mount is in. His son has been operating the business for several years.
 

roro

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Wellington
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Ross Craig
Just got an interesting phone call from a owner/operator business in a neighboring community who wants me to take over his business on a commission basis. Outside of my regular territory. Would probably have to hire someone to do the work. May have one person available. Can provide lots of support. Suggest commission is 70% for me and they provide someone to answer phone and schedule. They charge my rates and a little more. Any advice?
Why take it on a commission basis. If you build it up through your efforts then he benefits. Would it not be better to buy his data-base, and make him a fair offer if you need the equipment and his staff member to service the increased business.
With the torrid times we are all going through one would want to discount the database cost as well.
roro
 

Cleanworks

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New Westminster,BC
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Ron Marriott
Why take it on a commission basis. If you build it up through your efforts then he benefits. Would it not be better to buy his data-base, and make him a fair offer if you need the equipment and his staff member to service the increased business.
With the torrid times we are all going through one would want to discount the database cost as well.
roro
I am thinking down that road as well. Starting out just paying them a commission will give me a way to evaluate the business before I invest any money in it.
 
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Jeff T
Ron, a few random thoughts off the top of my head...
-Is this going to affect the business you currently operate?
-Do you have a reliable person (tech) to be able to cover the increased work load?
-How many jobs a week does this other company do?
-Do they do only residential, or commercial aswell?
-what chems do they use compared to what you currently use- are you going to have to switch chems when you do their jobs?
-Who is responsible for the daily operating costs of the second business?-Fuel costs-maintenance?
-If it’s a profit share, then it should be a Costs share aswell...
-Tax time- who pays the income tax? -GST?
-how long have they been in business?
-What’s their reputation like?
Is their van wrapped? Are you going to have to switch vehicles every time you go from your clients to theirs?
-How large is the client list?
-IS THIS SOMETHING YOU WANT TO TAKE ON @ THIS POINT IN YOUR CAREER???????
 

Cleanworks

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Oct 22, 2012
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New Westminster,BC
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Ron Marriott
-Is this going to affect the business you currently operate?
-Do you have a reliable person (tech) to be able to cover the increased work load?
-How many jobs a week does this other company do?
-Do they do only residential, or commercial aswell?
-what chems do they use compared to what you currently use- are you going to have to switch chems when you do their jobs?
-Who is responsible for the daily operating costs of the second business?-Fuel costs-maintenance?
-If it’s a profit share, then it should be a Costs share aswell...
-Tax time- who pays the income tax? -GST?
-how long have they been in business?
-What’s their reputation like?
Is their van wrapped? Are you going to have to switch vehicles every time you go from your clients to theirs?
-How large is the client list?
-IS THIS SOMETHING YOU WANT TO TAKE ON @ THIS POINT IN YOUR CAREER???????
All good questions. I've know the primary owner for over 30 years. He has a great reputation in the community. Their business has suffered a little over the last few years due to the owners health. The son has been doing the work. They are the same size and volume as I am. I would have to hire someone to operate that sector. I have someone in mind and we will talk over the weekend. I also have a second person with his own equipment who will help out if I am stuck. I am talking to the owner and son on Monday and go from there.
 

clean image

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Oct 5, 2012
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Orlando
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Carl Maddock
70% to basically be a sub contractor is not bad. And You are using their equipment....

You could pay your guy 1/2 of that, 10% for fuel, and chems.
who is paying auto insurance?
you would net 25%
If you could set it up where you are hands off, no brainer.
 
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Ron K

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Jan 3, 2009
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If it's good fit. Work it out and get it fixed and able to sell. Set up a young buck and just gradually have him take the reins. Keep a 10 or whatever %
stock or ownership/consultant or whatever too keep you involved in profit and not liability consider it a little savings account for retirement.
 
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Cleanworks

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New Westminster,BC
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Ron Marriott
Met with the son today and hammered out the details. Right now he slow and I'm slow so it's a good match. We'll have to adjust as we go. I get 70% of the gross, use my own vehicle and products. He pays the CRM and person answering the phone. Looks after advertising, etc. I think it may be a good match.
 
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