Mad Baker,

I am in negotiations to buy an existing bakery. We have agreed to a purchase price of $320,000 which includes $135,000 of inventory and equipment and $5,000 for a refrigerated truck. The bakery does special occasion and wedding cakes only. The seller has $15,000 in customer deposits that she wants to take with her. They are non-refundable to the customers. We think we are already paying for this as part of the purchase price and that this will eat into our profits since we will be making the cakes and not her. She says she has already incurred 20% of the costs trying to obtain the client, which is debateable. Is wanting to keep the customer deposits with the bakery unreasonable? Do Sellers typically get to take this money with them? Thanks, wellsdg

By Chefmanny (Chefmanny) on Monday, October 27, 2003 - 11:24 am: Edit

BS, you are right, that's your money since you bought the business, unless you agreed otherwise.
If those are her thoughts, lower the price of the business by 15K.
Is the equipment really worth 135K?? Is it new, old? How about the truck

By Chefspike (Chefspike) on Monday, October 27, 2003 - 04:47 pm: Edit

Get someone in there to price out that equipment.
don't take her word for it.
make her take or dump the crap stuff, (if there is any) off the price.
Why should you pay for it?
you shouldn't.
tally up the food too.
find out what the wholesale cost is, make sure she's not putting a percentage on.
The 15,000. stays with you.
If the truck is 10 years old, get it looked at and find out if it's worth 5,000.
CHECK EVERYTHING !!!!!