(Topic ID: 199230)

Got an offer to sell my route.... How much is it worth?

By Okarcades

2 years ago

Topic Stats

  • 76 posts
  • 45 Pinsiders participating
  • Latest reply 1 year ago by LTG
  • Topic is favorited by 7 Pinsiders


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    #59 1 year ago

    In my business I have come across a similar situation, but as the buyer. I organize Business English training for companies in Germany and sometimes school owners who want to quit offer to "sell" me their clients. That means they will personally introduce me to their contact and recommend me. I also commit to take on the trainers they have been employing. So for the sake of comparison let's say the trainers are the pinball machines and the income they generate is the coin take.

    The school owners always initially want a deal like the one the thread starter suggested, which is based on a future projection of past earnings. However, a number of things can go bad. If business slows down, training is a benefit that is often dropped. Or the client agrees in principle to the deal, but then hires the trainer directly and cuts me out. Etc, etc, etc.

    Basically a price based on future earnings in a business lilke mine poses an unacceptable risk for me. Therefore, whatever price we agree on is always paid in installments and only as long as the clients I have "bought" generate income. I usually do pay 20% of gros earnings for the first year and from then on 10% until the agreed amount is paid off.

    In my business it's very easy to show how much income a client generated and the seller could easily check whether I was lying if I claimed training had been stopped and he didn't believe me. I have no idea how that is in the coin-op trade.

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