hello, nice to meet you!

Hi my name is mark im from the northeast and i have recently been offered a chance to purchase an up and running pressure wash business. i was hoping if i posted the particulars of what the business includes and the accounts involved if you guys would be able to give me your opinion on whether this is really worth my investment. im really excited to be running my own business but i dont want to end up paying more than the actual worth of said business.
ive been lurking around for about a week and you guys seem to know this business very well and i could really use a professionals opinion.[help]

Post what you are going to buy and what kind of account don't have to tell us who they are

ok, here goes it.
equipment:
1. 1996 cube van 145,000 miles @worth $5400
2. 1 2006 hotsy hot water
3. 1 2007 northern star hot water skid mount
4. 1 cold water skid unit
5. 3 cold water unit 3000psi
6. 1 450 gallon tank
7. 1 500 gallon tank
8. 400 feet of hose
9. 6 wands/ various tips.
10. 2 hot water skid mounts (broken but repairable)
11.whatever soaps and chems he has left.
He has 3 fleet accounts as of right now which gross 20,472 yearly,same accounts as when he started.
He has two under the table employees he has work with him on the weekends (i know this is a bad idea, "under the table" an all)
Company name will be included in the sale. Current owner has owned company for 5 years. Owned by a different owner for years before. (locally established, has been around for a number of years)
The current owner only pressure washes on the weekends, he also owns an established blacktop company. The reason for the sale, he claims he doesn't have enough time to wash, he has three kids under the age of 5.
He has offered to open his books to me.
total cost $80,000.
Cut to the chase, i see $20,000 worth of equip. and $20,000 worth of established accounts. thats only 40,000. that leaves me with 40,000 of profit on his part, which i don't think is total as he has said in passing that this 80,000 is what he owes for the business himself. which means to me that its not worth what hes asking. yes/no?

im just going to leave it at this and you guys tell me what you think. ask any questions you like and i will do my best to answer them and/or contact the current owner to find out.

thank you for your time. any input would be valuable to me as ive never owned my own business and the thought of this is very exciting.[spin]

If you can afford that, I would put 20k into new equipment and 20k into
marketing your new biz and consider that you made 40k in profit already.
If he doesn't have time to do the accts, go there and bid on them.
That's way to much for that. Just my opinion.

good, thats how i felt when i got all the perticulars. he originally bought this from another owner. he paid 113,000 for more equip including a 20 foot trailer and many more account. hes let the company dwindle and didnt paydown his debt fast enough. and now it seems he owes more than its total worth.

If you have that much cash flow Just go out on your own and
and spend it on all new stuff market and go from there or you can go with a cheaper used deal and save some money just in case the biz plan don't work out for you. Cause I think it is harder to get top dollar for used equipment.

@ 20,000 thats not worth nothing with out a contract
80 k is a lot to buy into a failing biz...Look around and find a trailer setup and go out and make that ++++++

Good Luck

I was considering buying out a business a couple of years ago. That business was offered to me for $60,000. the business generated $1800 a month. You need to be able to pay off the business in 18 months with the profits generated. The profits he is claiming would pay the business off in 48 months, not figuring any interest incurrred. Ask for the Schedule C for the last 3 years. Also ask how much the business generated "under the table".
If you get serious, have an accoutant look over the Schedule C. Then if you are still interesed, the accountant will want to lood at more business information. Be sure to let the accountant know about the "under table" wage being paid. If you buy the business, structure the purchase so you are not liable for any of his taxes, unpaid bills, or other financial burdens.

My feeling, walk away.

Reason #1. The business in not worth $80,000
Reson # 2 . He is already cheating & lying to the tax man, his employees, his current accounts. Do you expect him to be honest with you?

Everybodys honesty is questionable to me. I have already talked to my accountant and he originally put the doubt in my head but hes is just my accountant and lets me make my own decisions based upon the info he gives me and he always plays devils advocate.

you guys have given me some valuable information, thank you. i think that with what ive seen of his busness, what my accountant says and your opinions as proffessionals i have decided this buyout is not the path for me.

i have thought about starting up my own wash business. it should cost me much less at startup, but there will be no established accounts. Thats the part that scares me.