[Jims5543]

When I bought the land surveying company I own I was faced with this same problem. How to put a value on the business I was buying.

The widow od the previous owner liquidated all the trucks, computers and equipment. Then decided to sell the business which was basically Files, Clients and good faith.

She initially asked for $475K. I spoke with my local bank president and my accountant both offered the same advise.

What are you buying (selling)? Client lists, good faith, files? What are they worth? They have the potential to make money of course but how does that happen? Is it because of you? Will the clients stick around when your gone? You get the picture.

I was then offered a discound on the company, it was reduced to $175K then after 3 weeks and the company now loosing clients. (I was actually running it while we negotiated giving it more value than it really had) Then she wanted $125.

The bank president told me that it was worth more like $10-$15K but since I was friends with the owner (not his wife) offer $25K.

She balked, freaked out, called me names and insulted me. So I told her to find another buyer, my little 2 man company was making me good money.

She took my offer at $25K. I lost about 50% of the clients in the transition, mostly because when other Land Surveyors hear one of their own die they fly in like vultures and scoop up the clients. It was tought for me to keep them when that was happening and we were still negotiating the sale.

There are companies the do appraisals and put $$ values on companies. I would seek one out and have them put a value on it. That was my next step when we were negotiating.

There is one of these appraisal companies next door to my CPA's office, I can get the contact info for it if you want.