Would you please give me the advise on whether the asking price is reasonable. The business is related to the carpet outlet to niche market to Asian and Hispanic communities with good customer base. The business performance could be improved with additional inventory, advertising and additional sales channels. The show room is apprx 6000 sq-ft. Monthly rent is apprx $3000/month. Asking price: $100K (including inventory and FFE), gross sale $400K, cash flow 45K, FFE $15K, Inventory $30K.

Please give me the advise if the asking price is reasonable .. also, if we can agree on the final selling price, what areas I should look at for closing without rely on many outside consultants. We are thinking about lease agreement, customer list, product list, book values of FFE, list of saleable inventory, payroll, receivables, payables, financial statements for 2003. The owner told us that all records are kept in the computer. Any advises you could provide are higly appreciated. Thank you

As long as the following are true:

1- The numbers hold up to scrutiny.
2- Your idea of cash flow equals mine
3- You are not buying a $45,000 a year job for $100,000 {that is, the money spent on the salary of a manager is included}

Then it does seem like the price is fair.

"....what areas I should look at for closing without rely on many outside consultants. We are thinking about lease agreement, customer list, product list, book values of FFE, list of saleable inventory, payroll, receivables, payables, financial statements for 2003....."

I do not recommend doing something like this without an attorney and an accountant. I know that the temptation to save a couple of thousand is great, but after all you are making a $100,000 purchase.

From what I read so far…. How about a non-compete or financial information from prior years?

HP - The prior years' financials should be a big priority - our bank would require them. Anyone can do anything with one year's financials.

I think he is going to buy it all cash.