I have a CPA I chat with and have talked about this with friends and thought it through a ton, just looking for outside voices.

I am acquiring the company I have worked at for 15 years as the owner is retiring. We are a service based micro business(3 FT employees, 1 PT, freelancers as needed)

Company has been around for 4 decades, we have an excellent client list and I personally work with all of them at this point, so the change in face/name/relationship won’t be an issue, 90% of our work are reoccurring B2B clients.

Before covid we planned to do the deal for $500k, owner would finance the whole amount and be either paid a salary or as a consultant for 5 years - they would slowly back out as we transitioned and work as needed. Transition was to take place in July, 2021.

Then covid hit. We essentially lost 14 months of revenue and only now are getting reestablished. We haven’t reestablished terms yet, but the deal is still on, just moving to Jan 2022 as we need to renegotiate our lease(landlord knows I’ll be taking over, we’re just paying prepandemic market rates and lease is up in 12 mo) pay off some debt that was taken on during covid and just get back in the flow of things.

I think there is both opportunity to lean up the company slightly and also growth with more consumer clients and a bit more hustle, I can see this becoming 50-100k/yr of new business with no additional staffing costs. Beyond that, I want to stay mid volume and mid-high priced and enjoy a decent work/life balance.

We are now talking about doing a deal where instead of getting X amount over 5 years, maybe we do a percentage of gross revenue for 5 years, I have a feeling he’s going to go for 15-20% based on our old average numbers. I’m not sure what to propose.

The annual numbers- Annual revenue - $525-600K(based on 2009-2019) Fixed expenses(rent insurances etc) $140k owners take(salary+disbursements) $150-200k Other salaries(inc bonuses) $180k Other expenses are minimal and typically only pop up when we are much busier than normal so they come with additional revenues.

Thoughts/opinions?