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Forum nameFinancial Feast
Topic subjectPaying %age for business
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664, Paying %age for business
Posted by OraarO, Fri Jan-09-09 09:41 AM
Looking to take over a service business from current owner.
He will help maintain machinery and teach me as needed. I have worked with him for several years, the business can be very profitable.
He needs to do less physical and more mental/office end of the business.
He is asking for 18% off the top of every job from current customer base in the future. (Most jobs run at less than 20% cost for materials and overhead, so I could still pocket 60% after paying him and materials.)

Plan is for 5 years, I pay him 18% of repeated business, anything I find on my own, he gets nothing.

Does this sound reasonable/comparable to any situations you may have heard?

Seems high to me, but also great opportunity to make more than I currently do, and if I can bring in more work, what is there to loose, right?