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Again, in a lot of these cases it’s a guy who has ‘his’ clients for 20+ years and they’re often either old themselves or don’t want to switch to some random guy who bought the business. They have deep preferences you or your (likely high churn) employees mostly don’t know, and new client acquisition is often through a large, extensive network of communal contacts you probably don’t have, whether it’s church or the golf club or people the previous owner went to high school with. And they know where to find competent local (illegal, often) workers, may speak OK Spanish.
So what you’re actually buying for $900k is some old equipment and ‘contracts’ that will quickly vanish when the regulars realize it’s not the same company anymore. The only time you should buy one of these businesses is either if you’re a longstanding employee and the owner has no heirs OR if you’re in the same business locally, know existing and potential clients, and want to expand your operation.
Depends on the business. An accounting, legal, or insurance practice? Yes. My uncle sold his insurance business to a bank and then had to come back out of retirement because his clients left and the conditions of the sale were no longer being met.
A landscaping or tire repair business? Not so much. Do you know your landscaper or plumber personally? I don't. I just call the number I always call and a different random guy does the work every time. The business sale would be entirely transparent to the customer.
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