A friend and business associate has asked if I'm interested in buying out his company. It's an incorporated construction subcontracting company, $20M in annual sales, and doing very well despite current economy. He has offered to assist in financing the acquisition.

What are my first steps in placing a value to the company?

Me - experienced and successful at managing $50M+ in projects/project teams, but have never operated from an overall company level.

Any help appreciated!

The best first step is to sign a confidentiality agreement that will protect both sides from any disclosures. Your friend will need to share their books (P&Ls, Balance Sheet, Cash flow, etc) with you in order to do a full analysis of the value of the business. A review of their business tax returns will also help you establish whether their book-keeping is being reported accurately.

If the initial review of the books look good, then hire an experienced attorney and/or CPA to perform reviews of UCC (lien) information and all other "due diligence" activities. A good attorney will be able to walk you through the process.

Good Luck!

Ehren Koelsch
Mira, Inc.
303-242-8930
www.miraretail.com