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Old 03-28-2013, 07:23 PM   #1
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Default New guy, hello all! question about to my fellow CALI guys

Hey Guys,


First post, been a lurker for a short while. Just wanted to say hi, and ask a question

First off, love the site. Hands down the best site for aspiring contractors to learn from.
Now, I have a weird situation and I was wondering if you guys could give me your .02 on the matter.

I want to buy a painting business from this gentleman that has run and operated it for 25 years. He currently is (semi-retired) but still does side jobs on his own. Honestly, I would like to buy it because of it's reputation (25) years in business. I know to some of you, it may sound dishonest or unethical, but from a business prospective, it's a pretty smart move imho.

So the question I have is, if he sell me the business. Does he take his Contractors license number with him? meaning he could go and open up another business and use his OLD license number (it starts with a 5, so he's a 80's guy)

I have no problem with him reusing his number and opening up another business. He's a really nice guy and I want him to continue working and putting food on the table. Our only concern is, will he get to keep his 5***XX number where ever he goes.

Once it's sold to me (i have no idea how the process works) I'm assuming I take over as the sole proprietor and have cslb reissue a new license for the business..... Am I right to assume this?


anywhoo... thanks again for reading all this, any answer is better than no answer imo so please, let me know what you think
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Old 03-28-2013, 07:36 PM   #2
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First off - welcome to the group!

Others, more business savy than I, will weigh in here but I would imagine the rules about license numbers vary from state to state. So checking with your state's contractor agency would be a place to start. My guess would be the license number would not be transferable. But I personally wouldn't worry to much about it. The company's name recognition ("branding") is more important than the license number is.

In buying the guy's reputation you have to realize that you are paying for mainly "blue sky" - an intangible item versus hard inventory (sure, you may be getting some inventory but unless it's a pretty big operation it's usually not going to be much). Nothing wrong with that as long as you realize that doing so will only get you so far if you can't keep up the quality and customer satisfaction he provided.

Of course, you could stipulate a no-competition clause in the contract and have it in place for a set number of years. But it sounds like that isn't something you are too concerned about. Still, if I was paying a guy for his business name, I'm not sure I'd want him out there competing against me and potentially taking all his old customers with him. Just saying.
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Old 03-28-2013, 07:42 PM   #3
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Welcome to the group!

I have no idea about the license number so I can't help you there, but good luck in whichever direction you choose to take.
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Old 03-28-2013, 09:18 PM   #4
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What is all included in the buyout besides the name? Customer lists? Equipment? Employees?

The license thing will be different by state.
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Old 03-28-2013, 09:26 PM   #5
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I seriously doubt you will get to keep his number. Even if this guy is your dad you will still have to get your own license.

I'm not a law guy but go over to ContractorTalk and search for a guy named LicneseGuru and ask this in his thread over there. He will know.

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Old 03-28-2013, 10:17 PM   #6
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Hi, welcome.

Your post reminded me of a story.
My brother was in charge of our family business for a while and he was talking to an insurance agent. The agent ws trying to figure out how much the business was worth and asked my brother to figure out how much insurance he would need.
My brother said it wasn't worth anything.
The insurance agent asked, "Well then can I have it?"
My brother said, "Sure, it's yours, what are you going to do with it?"

I thought it was funny.
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Old 03-28-2013, 10:22 PM   #7
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I agree with Pat, I don't think you would get to keep the license, you need to have your own. What are you actually getting out of the purchase? A good way to go would be to keep this man on a a partner for a time 5-10 years. I might pay him a percentage of your gross as a consulting fee. Then he gets to keep working and you inherit his customers over time rather than cold turkey.
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Old 03-29-2013, 12:43 AM   #8
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Hello fellow newbie.

I can give no advice on the licensing side of things i'm afraid as things work differently over here in Oz.

However I purchased a business last July from my former employer who was looking to retire.

As part of the deal I took on the company phone number, tools, ute, was introduced to clients, had a resonable amount if work booked ahead of me, was educated on the pricing/quoting structure which was in place, was provided with the books for the last 5 years (profit, loss, time, size of jobs, etc, etc), I also stipulated that I would like him to work with me for the next 6 months to ensure a smooth transition. In addition to this - and this one was a deal breaker there HAD to be a non-competition clause.
Although we got on well and he was retiring and leaving the country, I'm quite glad I insisted as he is returning to Brisbane in the next few weeks. Instead of him competing for my customers business he called to offer to work for me - he is still able to make a living, however my investment is protected.

He may well be a nice fellow but you need to protect your investment
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Old 03-29-2013, 03:46 AM   #9
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Gus, if it doesn't work out, come to Melbourne and start up.
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Old 03-29-2013, 03:39 PM   #10
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Thanks for the helpful info guys, I really do appreciate the feedback.

So for this situation, he's too old to really be competitive, he's planning on doing side jobs when he can just to keep himself busy, kinda like fishing, he's not doing it cause all the catchin (money) he's doing it cause he likes staying occupied.

Now, The business im purchasing is solely just the name and reputation. (not that much reputation, but mostly history)
I'm not buying his tools, his clients or his phone number, or anything physical in that matter. Just buying the name.

I'm not spending too much so I don't want you guys to think im giving this guy lots of money, but it's not small by any means.

I'm just curious as to whether he keeps his license number that he's had for 25 years. I personally don't need it, i have my own and I'm assuming once I take over, they will reissue me one under this new business or apply my current number. I'm not a 100% sure how this works. I've tried contacting cslb via telephone but stupid infinite loop recording damn near had me chuck my phone out the truck window.

So ultimately, he wants to keep his license number, so my question is, is that possible? since the license number is issued to the person not the company, right?

thanks again guys
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