Owner ready to sell, How to...

[pepe112]

Find Investor/Buyer/Partner for acquisition? I work in this company at a high level position and truly believe to be a great business with a unique business models, about 2.5 million in sales and a very low estimate of 20% margin. It currently has long term contracts in place with a potential for much more.

The issue, it has been grossly mismanaged, shareholder distribution eats most of the profit as the owner use it as a personal piggy bank and controls are non existent in despite of that the company has continue to growth even during the recession.

I just find out today about the Owner decision and truly believe this to be a great opportunity and will like to find an Investor/Partner or Buyer. My dilemma is where to find these individuals rather quickly to present an offer? and how much such a business is worth?

Any input or guidance will be greatly appreciated.

[websonalized]

I would start by first registering on LinkedIn and start my search there. The network is all about business professionals and most of them are there to connect and do business.

You would be surprised how quickly you would be able to find someone.

[Freelancier]

A 20% profit margin on 2.5 million is a $500K per year profit. Most companies are valued at 3 to 5 years of profits (if they are profitable, some multiple of sales or cash flow if they are not). So you're looking at trying to raise anywhere from 1.5 to 2.5 million. Not small change, more than typical angel funds, which are easier to come by. The question you'll need to answer before you find investors: what do you bring to the table and why you should be the person they want to run the place? And VCs are often not pleasant and want to use their companies as piggy banks, so you might be right back where you started.

[huggytree]

its value can be 3-5 years of profits.....but that depends on equipment....maybe there is $1,000,000 in machines....maybe 10 company cars, etc

im sure its value is in the millions

i have no idea how you would find investors....you obviously need them......starting this big may not be for a guy w/o millions to spend???

investors may want too high of a payback during a recession.....

good luck!

can you copy this business model and start your own version of it on a small scale by yourself....maybe for $100k-$200k...you could always borrow against your house, etc