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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Finance
Satisfied Customers: 41220
Experience:  NASD Licensed Rep, 1997-2001, Business Attorney
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I have been approached to sell my business to a larger

Customer Question

I have been approached to sell my business to a larger landscaper / nursery. They want me to come on and run there crews. They have a small residential business(25) they want to add my (70). They want me to grow the business for them. I had gross sales of $200,000 last year net income of $92000 I have older equipment wirth around $35000. How much should I be paid for my business? How much should I be asking for in salary run the crews and grow business. I am in nj
Submitted: 11 months ago.
Category: Finance
Expert:  Dimitry K., Esq. replied 11 months ago.

Thank you for your question. I am a licensed New Jersey attorney and will be happy to assist you with your concerns.

If I may ask, did you receive any sort of an offer for your business? How long have you been in business at this time?

Customer: replied 11 months ago.
Been in business 7 years. They offered me $60k for equipment and customers(66). They offered me 60k in salary
Expert:  Dimitry K., Esq. replied 11 months ago.

Were you offered any sort of a benefit or bonus for signing on? Were you offered some sort of a guarantee for time--such as a guaranteed salary or position for 2 years, for example?

Customer: replied 11 months ago.
No on both
Expert:  Dimitry K., Esq. replied 11 months ago.

Hi,

Typically you need to evaluate what protection, if any, you are being afforded by this offer. Based on your own answers it would appear that they are not in any way bound to you with this offer--that means that they can pay you this money but then fire you the first day at least as far as salary is concerned. Now, the vale of the business is generally based not just on the equipment but how much business you end up doing over a set period of time (this is known as your 'turnover'). Some types of businesses are supposed to have low turnover (think luxury boats or super expensive cars), and some are supposed to have very high turnover (think of a fast food restaurant). A landscaper is generally seasonal, so the turnover is not super high, but if done right, it is fairly steady, especially if you work with home or condo associations year round. Now, a good price is anywhere from 6 months to 2 years of sales, depending on turnover. In your case, because you have lower turnover, a year's worth of sales is probably a fair evaluation. Now as far as 'salary', consider demanding a guarantee for a certain period of time so you do not get removed without cause.

Hope that helps!

Sincerely,

Dimitry, Esq.