Littleguy Offline Upload & Sell: Off
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Two general approaches when buying a business:
1) Buy the assets
2) Buy the company
Buying assets is nice and clean – no liabilities or law suits to worry about from past clients / suppliers / staff / business partners of the old business. The old business closes up and you start a new business with the assets of the old company. You can use the old name but for legal purposes it is a new entity.
Buying the company – you keep the business running as a going concern. Sellers prefers this method as tax treatment is better – at least in Canada – don’t know the US tax treatment for this. But you are now responsible for all the legal liabilities of the old company – known or unknown at the time of purchase.
For a photography business – what is there to buy?
- Cameras / lenses and lights
- Real estate if any (leases or property owned by the business)
- Client lists / mailing lists of past clients (for weddings – kind of useless), for portraits, if he didn’t sell them files, they may come back for more print or products. But usually client lists are worthless for a wedding photography business
- Domain name / telephone number / e-mail addresses – if the business gets the bulk of the business from that domain, it could have great value.
In your case, since the old owner wants to continue the commercial side of the business, he may not be able to sell you the old company unless he sells you the old company and he starts a new company to service the commercial clients. Of course, who is going to own the trademark name for the business? Will he be using the old trademark name for his commercial business – how will the business name be split up between the consumer side vs the commercial side of the business?
Most people don’t purchase retail photography businesses as there isn’t much customer loyalty for photography these days. Only thing of real value would be the real estate for the studio space. Camera equipment depreciates fast, similar to most other business equipment.
I think it would be simpler if you started a new business and just paid him a set fee for every portrait / wedding referral he provides.
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