Buying a business

Members do not see these Ads. Sign Up.

I am have looking for some advice as have never brought a business before. From observations the business appears to yield between $140,000-$160,000 per year for 25-30 hours per week. It is a leased premises which costs $500 a week for rent then reception cover which is shared with another practitioner (not a podiatrist), which comes in at about $300 per week. So approximately weekly outlays could be rounded to $1000.

The sale would include existing stock such as an autoclave, chair, instruments ect. I am just looking at what type of figure I should be expecting to pay roughly? Obviously I realise I am likely to lose some existing clientele and it is probably one of the most important decisions I have yet had to make. I have almost 8 years of experience in podiatry but have never brought a business.

Appreciate any advice, thanks in advance.​

 

So income of $140-$160K
minus $52K for rent and reception
minus your insurance, professional and equipment
minus amortization of the investment
minus cost of finance,
minus upgrade of equipment
minus advertising/marketing
minus phone/internet
minus software license
minus lost income to attend a few conferences
minus cost of the conference.
minus your wage $85K
and minus wage during your holiday

What does the basic accounting say? What are you buying?

If your in business not earning $250K per year, in a 38 hour week your not making money IMO.

 

Thanks. In your opinion what should I be paying for it? It does not have a website or any marketing so I was hoping to do that if I brought it. It sounds like it is a bad idea though.

 

Reading what you have written and understanding a website may cost another $2500-$4000.

If you were one of my children, l would suggest you do the maths or better still, get an accountant and talk to them.

 

An interesting topic ... I have looked also at buy out options. It seems most sellers are looking to rake in a year's earnings from the sale of their office. What I can glean, from blogs etc., that's almost always an unrealistic expectation, especially in this health climate. Very hard to know who can provide independent professional advice to assist. But I feel there ought to be someone with experience of the podiatry market who can assist with the decision making process.

 

Hi AJS,
Im assuming you are in Australia.
If the last financial year gross profit is $160 K, I would be thinking a price of a little under of of that, about 65-70K.
I would consider that to be about a fair price. Obviously the Vendor will want much more than that and you will want less than that. The only real thing of value is the equipment. All depends on how old the equipment is. 'Good Will' does not come into the equation as much as you would think. Speaking from experience with sale of practice.
30 hrs for 160K sounds good. The rent sound high for 30hrs if its sessional. If you have exclusive use of the room all week with reception for that price ...not so bad.
Hope that helps.
Mark