[Scotbrite]

Hi Guys,
Just wanted to ask a question, if i can. All thoughts appreciated.
I have the opportunity to buy a contract providing cleaning services to 11 supermarket sites for daily cleaning across certain areas in Scotland. The info i have at the moment is that the turnover of this is approx £5.75k per month, gross. £1.75k profit. Any thoughts on what the value of this would be ?? The contract has been in operation for approx 9 months & is not for a fixed term but rolling, dependant on satisfactory results of course. I will see all the facts & figures next week when i meet the person.
Cheers
Ron

[Tony Hodgkinson]

All being honest with it being a rolling contract you could buy the contract off the person/company and it could be cancelled the next day.  Its a tough choice to make but I personally would stay clear unless there was guaranteed hours for a long period of time. Realistically you could contact the supermarket today offering a cheaper rate and they could cancel the other company and give you the chance.

[Scotbrite]

Thanks for the reply Tony. I understand your comment regarding contacting the supermarket directly but it would be underhand, especially as i have had a conversation with the current contractor OR would you see this as "just business" ??

[Tony Hodgkinson]

What you have to think about is would someone do it to you?

Its dog eat dog in the business world. I have many companies I have great relationships with and I can seek advice from but when it comes to winning contracts you have to think of number one.

If the contract that was on offer was a long term or a couple of years I would say go for it.

I have a number of rolling contracts in my areas and they aren't worth a carrot. Yes im making money but it could be gone tomorrow.

[Scotbrite]

Thanks again Tony. Points noted !!!

[Tony Hodgkinson]

Your very welcome

[Timmy Boy]

Hi Ron
What I did on a similar circumstance (it was a carpet cleaning company which were selling their client list and were going to port the telephone numbers to me - all goodwill no contracts). It generated an income of £2000 per week, so I offered 8k based on a phased payment so basically I paid the guy from the profits generated but then had the business and a foot in the door with all the customers. I would value this at a similar cost - offer 2k up front and then a further 2k every quarter until you've paid up but in the meantime prove your worth and use the year to work on longer term agreements. Everyones a winner and if any walk away the price is reduced.
Hope this helps
Regards
Tim

[Scotbrite]

Thanks for the reply Tim. I was taking it more on the lines of £6k (4x the monthly profit) but your idea of phased payments & a walk out clause is a good idea.

[Tony Hodgkinson]

Great advice Tim