1. Contributing User
    Devshed Novice (500 - 999 posts)

    Join Date
    Nov 2003
    Rep Power

    Merging with/purchasing another company

    I own a tiny company that develops software. I contacted a competitor with approximately the same size company as mine and initiated a conversation to transfer his customers to my company. A face-to-face meeting has not happened yet and I have a question about setting a price for an offer. First of all I will only "buy" his customers and I do know that there is a lot of thought that needs to take place in order to make sure that this owner will not turn against me after the transfer. I will go to lawyer at sometime to get advice and legitimize the deal.

    The customers pay a monthly fee for support. Lets assume that the other company has 10 customers that pay $100/month for a total of $1,000/month. Their company is not growing by leaps and bounds and I assume that they are not happy with their growth potential.

    How do I go about making a fair offer to them? Should I offer them a percent of their revenue, say 25%, and after two years or so give them a cash settlement, say two years worth of revenue?

    Thanks for any suggestions.
  2. #2
  3. No Profile Picture
    Registered User
    Devshed Newbie (0 - 499 posts)

    Join Date
    Jul 2010
    Rep Power
    Maybe you should offer a preset amount of money for each client, it will be fair and good for you, as you will not have to deal with them regarding the clients in future.

IMN logo majestic logo threadwatch logo seochat tools logo