Buying out a Competitor?

[Cleanworks]

So..............can anybody answer his actual question?

Scott already did.

 

[Trip Moses]

So... I am going to offer a 10% six month commission on the commercial accounts. I have no interest in the residential clients. They will call whoever they want. Maybe me?
Maybe not?

 

[FredC]

Scott already did.

I thought there might be some input by people who did it adding some of the details Scott mentioned

 

[hogjowl]

Really?

 

[Cleanworks]

I thought there might be some input by people who did it adding some of the details Scott mentioned

Well, you know what thought did.

 

[FredC]

Really?

no........but I was hoping......being the guy that has to promote this forum as being professional and chock-full of industry geniuses............

 

[Trip Moses]

I thought there might be some input by people who did it adding some of the details Scott mentioned

That’s what I looking for. I’ll just try what I mentioned above. If it works great. If not, I’ll still sleep good at night.

 

[Cleanworks]

That’s what I looking for. I’ll just try what I mentioned above. If it works great. If not, I’ll still sleep good at night.

I have no idea what's deductible or what but if the guy was a creditable carpet cleaner and his customers liked him, chances are his customers will give you first kick at the can. His customer list can be a gold mine. I would send out a mailer to all customers explaining what has happened and who you are and I bet you will get a flood of work. If they like you as much as the last guy, you're golden. Half of the customers won't even remember who he was or care. After 30 years, I still have customers calling me Ray. The name of the prior owner.

 

[hogjowl]

Fred’s funny

 

[steve_64]

the question is about taxes Steve........and may hep someone here in the future


I think he gets that some of you view buying customer list as bad ........and that getting first dibs on commercial accounts that will not have a cleaner, a possibly well ranking site, and that guys repeats for $6.50 would be stupid

Yeah I missed that sorry.
I'm working on my comprehension.

 

[Mark Saiger]

I would think it would be considered a business expense but there might be certain tax advantages a good accountant would come up with... So I would honestly need to have a converstion with my accounting firm what they would consider best for us.

I don't think there are many of us that can come up with what would be best for a tax strategy but I would believe there are tax advantages to the purchase

 

[Jimmy L]

I come here to lern

 

[Old Coastie]

So..............can anybody answer his actual question?

Hold on; is that allowed?

 

[BIG WOOD]

I come here to lern

You need to learn how to vacuum

 

[The Great Oz]

So... I am going to offer a 10% six month commission on the commercial accounts. I have no interest in the residential clients. They will call whoever they want. Maybe me?
Maybe not?

In this case you're not buying any tangible assets, so account for it just like you would any other lead fee you pay.

I think only a really desperate person would take this offer though, as taking it would mean they know their business isn't worth anything. Good luck!

 

[bob vawter]

In this case you're not buying any tangible assets, so account for it just like you would any other lead fee you pay.

I think only a really desperate person would take this offer though, as taking it would mean they know their business isn't worth anything. Good luck!

A local competitor that is similar in size and gross income has offered to sell their website, phone number, repeat customer list. Residential and Commercial repeat customers.
Company that is wanting to sell is moving family three States away and are taking equipment with them.
My concern is not with customer retention or handling volume. My question how is buying what’s mentioned above a deductible exspense?

Then in THAT scenario.......that would
Make YOU the dumber of the two participants involved in that deal....

 

[Trip Moses]

Long story short... I did not buy since it would be me expanding my business into their customer base instead of their customer base expanding into my business.

 

[Trip Moses]

So the company that wanted me to buy their customer list eventually closed up shop and moved out of town. They were unable to talk anyone into buying their list. Come to find out they have been referring several customers to me. Which is great. What is better, is that I have figured out that they were padders. Needless to say, impressing their old customers has not been too difficult.

 

[BIG WOOD]

So the company that wanted me to buy their customer list eventually closed up shop and moved out of town. They were unable to talk anyone into buying their list. Come to find out they have been referring several customers to me. Which is great. What is better, is that I have figured out that they were padders. Needless to say, impressing their old customers has not been too difficult.

Do you think their business would still be open if they weren’t ladders?

 

[Trip Moses]

They had a very crazy back story. The guy who contacted didn’t even give me his real name. They weren’t failing as a cc business. They moved for family reasons. They had bought a TM about six months prior “for commercial work” to leaving But had previously padded a lot of residential. This is second hand info.

 

[Cleanworks]

Buying a customer list can be very profitable sometimes as long as you don't pay too much. It's a shame to see it go to waste.

 

[Trip Moses]

Buying a customer list can be very profitable sometimes as long as you don't pay too much. It's a shame to see it go to waste.

I’m maxed out anyway. Much more I’ll have to put another truck on the road. I don’t want to cross that bridge yet.

 

[KevinD]

I must have missed this thread the first time around.
With no tangible assets all you are buying is Good Will.
One business I bought it had to be straight line deducted over 10 years
but there are so many variables.

Goodwill (accounting) - Wikipedia

en.wikipedia.org

 

[Brian H]

So the company that wanted me to buy their customer list eventually closed up shop and moved out of town. They were unable to talk anyone into buying their list. Come to find out they have been referring several customers to me. Which is great. What is better, is that I have figured out that they were padders. Needless to say, impressing their old customers has not been too difficult.

If you want, wait for their old phone number to become available and have it point to your main number. It can be a cheap way to pick up some of their old customers.

 

[Trip Moses]

If you want, wait for their old phone number to become available and have it point to your main number. It can be a cheap way to pick up some of their old customers.

Nice!!