Home – New Forums New here? Share your story trying to purchase Coffee van and business

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  • #990933
    Bluflavour
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    Im currently looking to purchase a coffee van as it is with product and customer base in central/south Brisbane.

    I asked him questions regarding profit and tax across the term(36mth) of his business and he is unable to provide anything except for the last 4mths.

    He claims that records mean nothing in this business….. Alarm bells rang…

    If this seller is unable to provide the figures for the last financial year I feel that I’d be making one hell of a mistake.

    Has anyone heard of using a broker/tax/accountant when purchasing a coffee van?

    Thanks for all your responses in advance

    Oh I forgot…. Im NEW to this site and have already found out some key information

    #1179205
    ThexArm
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    It is always important to consult your accountant before making these decisions. If you don’t have an accountant there are few in this forum you can contact or consult. An accountant can stress test the numbers given to you. They will ask you right questions and they get to know your personal circumstances to advise you properly.

    If past 4 months numbers looks good, consistent and improving then there is something that is working.

    I would worry if you don’t get to see most recent numbers.

    #1179206
    Paul_M
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    Hi Bluflavour

    I personally think there are a few questions that you want to answer before making any decision:

    -Are you buying the company assets only? (van + equipment + stock)
    -Or are there any licenses or permit included where you have access to festival/specific parking spot etc…?
    -Are you planning to start the business using different sales channels? (e.g driving around workplaces in industrial areas?)
    -whats the advantage of buying this business instead of building your own coffee van? (e.g do you get some sort of franchise/advertising support?)

    If for example the seller was taking it easy doing minimum work just to pay himself a salary, I don’t think it will be necessary to see the last 2 years of his books.

    I would think that it is a fairly simple business model where location are not entirely exclusive to the current owner and therefore I would not pay a premium to purchase “the business”, but would negotiate a fair deal for the value of the van and stock.

    The most important numbers are the running cost, stock cost, franchise fee if any etc… so you can forecast the numbers and break-even based on what you intend to do and where you intend to sell etc… and work out your profitability. Just be realistic always…

    Best of luck

    #1179207
    Anonymous
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    Hi Bluflavour and hi Paul_M,

    A warm welcome to both of you :)

    One thing I’ve learned through this forum is that the very thought of buying a business without reliable figures is enough to make the accountants and legal experts amongst us break out in a cold sweat, so I’m with ThexArm on this one, and would be talking to an accountant about it before going too much further.

    Just my two cents worth :)
    Jayne

    #1179208
    MissSassy
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    Hi and welcome

    Chances are that this person doesn’t have any records due to the cash nature of it. The record keeping probably began when he though he would sell it.

    As already mentioned – What are you going to pay for?
    If it is just the van then nothing else really matters, except you need to figure out how you can make money with this van.

    Naturally a lawyer and accountant needs to be your point of call right now so that you can do the due diligence required, but without a full history you may just need to adjust the price accordingly and go with your gut feeling.

    #1179209
    bb1
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    MissSassy, post: 209083 wrote:
    Hi and welcome

    Chances are that this person doesn’t have any records due to the cash nature of it. The record keeping probably began when he though he would sell it.

    .

    I typed that yesterday than deleted it, because I didnt know if we could say that here. But spot on would be my guess any figures prior to the decision to sell would be very dodgy. And any after could be considered to be on the better side, as all of the costs may have been put in the prior to 4 months, and profits after.

    I think if you are serious about this one, yes go to an accountant, but he.she wont be able to give you anything valid on the figures presented, because they are rubbery at best. Go out with the owner for a week or 2, see what is really happening.
    How solid are the sites they have, are they just pull up and sell, or do they have long term contracts.

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