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Old 06-19-2012
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Default Buying an existing Virtual Assistant business
I've been doing some contract work for another VA business (our niche is Mary Kay Sales Directors), and have only 3 clients of my own. Today, the other VA biz let me know she may be interested in retiring and wants to sell the business to me.
Problem is, husband is adamantly against it. He's made some valid points, what if I agree to buy and make payments to her, yet some or even all of her clients decide they don't like the way I do things, they prefer hers, and they go elsewhere? Then I'm stuck still owing her money with fewer or no clients. Other problem is, I have great feedback on the products and services I have, and my website visits have increased tremendously over the past few months with my efforts in blogging and SEO, but I've had 0 conversions. I've had 2 contact me interested in my services, yet one couldn't get hold of me and in the 2 hours since she called me, she'd already found someone else. The other one I've responded to, answered her questions, but no response back. (I just followed up with a "checking in" email) I really need the income this already set in place business could give.
Is this a good idea? What do you guys think?
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Old 06-19-2012
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Default Re: Buying an existing VA business
If you do decide to "purchase" the business, I would make it an asset purchase (only buying clients, not whole business). You sign a contract in which she assigns her client contracts to your business.

I would also structure the contract based on a percentage of what you get paid by her clients. (She only gets paid if the client stays on and has billings with your company.)

There should also be a timeframe for the contract, 1 to two years. Once the timeframe ends you no longer pay her for the clients even if they remain with your company.

Hope this helps,

Julie
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Old 06-19-2012
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Default Re: Buying an existing VA business
Julie, that helps alot. Brought your suggestion to my husband's attention (he does the financials in our business), and he's more prone to accepting that idea, but is hesitant about the percentage. I told him we'd have to work that out, and come up with an acceptable time frame if we went with that idea.
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Old 06-19-2012
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Default Re: Buying an existing VA business
A standard percentage would be between 10 to 20 % of the monthly billings.

Make sure there is a clause in the contract that states you only pay AFTER the client pays. (Based on PAID billings, not invoiced billings.)

Julie
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Old 06-19-2012
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Default Re: Buying an existing VA business
Another name for this type of contract is a SALES REFERRAL AGREEMENT.

Julie
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Old 06-19-2012
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Default Re: Buying an existing VA business
I really like your niche. I don't know how long you have been in business, but it seems like it could really take off with the right marketing.

I agree with Julie. If you decide to proceed with this proposed transaction make sure it is an "asset" sale and that you are not buying the "business." When you buy the business you take on all assets and all liabilites. You do not want to be stuck with any liabilities she may have. Will her website be transferred over to you? Or will all inquiries to her website just be redirected to your website? I suggest that there be some type of transition with a joint notice/announcement to her existing clients about her retiring and you taking over her business. If her clients have confidence in her, they will more likely have confidence in you if she is part of the announcement/notice.

And like Julie said, make sure that the payments are based on actual collected billings with some type of sunset provision - i.e., you only pay the percentage of collected billings for a period of time.

And of course, you should document all of this in writing.

Good luck. This sounds like a great opportunity for you, and as long as you structure it right and document it correctly it should be a win-win situation.
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Old 06-20-2012
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Default Re: Buying an existing VA business
As far as I know, she plans on keeping her website, I think she's going in another direction. Another twist, we're both members of an email group a Site Maintainers Association, and she sent a message that she thought was going to someone private, but went to the group, including me. Now, she says she has several interested in "buying" her business. I definately don't want to get screwed with this and when hubby finds out she's now approaching others, he may hit the ceiling. We shall see how this plays out.
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Old 10-12-2012
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Default Re: Buying an existing VA business
Originally Posted by mksdesignss View Post
I've been doing some contract work for another VA business (our niche is Mary Kay Sales Directors), and have only 3 clients of my own. Today, the other VA biz let me know she may be interested in retiring and wants to sell the business to me.
Problem is, husband is adamantly against it. He's made some valid points, what if I agree to buy and make payments to her, yet some or even all of her clients decide they don't like the way I do things, they prefer hers, and they go elsewhere? Then I'm stuck still owing her money with fewer or no clients. Other problem is, I have great feedback on the products and services I have, and my website visits have increased tremendously over the past few months with my efforts in blogging and SEO, but I've had 0 conversions. I've had 2 contact me interested in my services, yet one couldn't get hold of me and in the 2 hours since she called me, she'd already found someone else. The other one I've responded to, answered her questions, but no response back. (I just followed up with a "checking in" email) I really need the income this already set in place business could give.
Is this a good idea? What do you guys think?
If I could as how you marketed to MK? I have distributors such as MK and others as a list of prospects but don't really know the best way to go about it!
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Old 10-12-2012
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Default Re: Buying an existing VA business
Since my original post, that particular circumstance didn't work out. She decided to "sell" it to her daughter and she wanted way more for it than it was worth. Tiffani, I have actually started getting clients now, mostly from promoting on facebook. I've made samples of my work and posted them. In the past 3 months, I've picked up 5 new clients.
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Old 08-21-2013
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Default Re: Buying an existing VA business
First of all I want to say congrats to you for buying new business. One thing keep in mind while buying, pay after holding papers in your hand through a good lawyer or an Property Management agent.
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