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Dec 6, 2012 11:11 pm

Well the time has come and I have been offered to take over my former bosses firm. He is retiring Dec. of 2013 and wants to start transitioning in the next few months. To give a little background, he works about 12-15 hours a week since he also has a mediation firm. His clients are very loyal and he firmly believes there will be a high retention rate. T-12 is around 180,000 and his overhead is around 45k. I know how to figure out a valuation on his business, but I am looking for a little feedback of whether I should make the jump or not. I have assets (not a lot, but some) of my own so my T-12 would be pretty good going into 2014. He is asking 425,000. I know that is a lot more than the going rate, but it is a turn key office. Assistant, bookkeeper, furniture, technology, the whole deal. I would also be grandfathered into his payout of 95%.

 

Any thoughts?  
Dec 10, 2012 1:13 pm

I would not pay more than 235-240k for that book. The valuation is way too high unless he is financing it to you over a period of 4+ years and available on a limited basis to ensure client retention. Even then your profit will be minimal.

What is the reasoning behind the current valuation?

Dec 13, 2012 4:01 pm

Excuse my ignorance, but what does T-12 mean?