r.bartlett said:
well whilst you are just a few guys on the internet -usually the ones who
frequent their vocational NG tend to be those who are quite into what they
do 'busmans holiday' 'n all
In case my comment seemed harsh, I do include myself in it. You have
no idea of our backgrounds and this is going to be an expensive
acquisition.
therefore I appreciate their/your advice whatever..as I have done so on
other situations previous
Ok, but you need to get your accountant involved to look at the
figures. If you're looking for outside finance to fund it, I would
imagine the lender will want some auditing of the numbers.
no I wouldn't expect to base my decision on this NG but whilst I will pay
for advice (which I am already BTW) a broad sweep across several 'experts'
here is more than welcome..
Every MD I've ever dealt with has had this idea that accountancy is a
science, and there is one, and only one set of numbers for the year for
his/her business. Every accountant will tell you it's more of an art
form
If you ask 12 accountants about this, you'll get 20 answers. In the end
I'd advise listening to the guy you pay, and who has provided your
audited accounts for years. I'm sure if he feels out of his depth he'll
seek assistance.
the company is a service based one with no trademarks widgets assets
tangables or staff except
a telephone number
maintenance contracts
'goodwill'
Maintenance contracts are good news. If the people are paying them, and
you have the guys to go out to the clients, they can be a license to print
money. I'd ask for a projection for the next years income from them, and
then you should be able to work out profitability. You will need to re-sign
the contracts at some stage, so if you can get the outgoing guy to trudge
round
the customers with you, then it help.
Goodwill is always the most difficult item to quantify, and be aware that
your
auditors will want it written off quickly, so it will effect your group
profits for
a few years. Again it's not science, goodwill is usually a balancing item
between
the book value of the assets and what you're willing to pay.
You need your guys to look at the figures, but the amount you mentioned
doesn't seem excessive.
and a boss who's 63 and winding down .....
I doubt he won't want to be locked into a consultancy deal, and to be
honest
you know your business, so you probably want him out of the picture
fairly quickly. I would try to get him to help you get the maintenance
contracts re-signed before he goes though. By re-sign I mean a fresh
period of say 2-3 years after expiry with your company, you could even
offer a discount for them to do so. This will assure you of a good starting
income stream.
