Hi. I've been presented with an opportunity to purchase a laundry business and would like a sanity check on a few things. I haven't seen the formal accounts yet but these are the figures that I have been given. The asking price is €75,000 which basically includes 7 machines (2 washing machines, 2 dryers, 2 ironing rollers, 1 steam ironing station) and the goodwill. The machines are all over 4 years old. There is no lease it's just €850 per month on a five year contract with the landlord. I'm told the landlord would renew or extend the contract if I required. Turnover 2007 - €70,356 2008 - €82,718 2009 - €90,210 The current owner has only owned the business since August 2010 and their turnover for 2010 August to December is €32,183. I haven't seen or been given and figures for 2010 Jan to July but have no reason that there would be anything sinister about them. There is a genuine reason for the current owner wanting to sell after such a short time of owning the business. There is a vehicle registered to the business but they want an additional €12,000 for it so I'll decline that. The business currently has 13 commercial clients which should stay on. Annual overheads are €33,454 which include the wages of one full time staff and one part time staff but do not include any wages for the owner. The owner does not work in the business, just cashes up at the end of each day. I will initially be relying on the business for my source of income. If I purchased this, I would be using my own cash, so no loans. I have a few ideas of how I could improve turnover but would need to validate them to make sure they would work in the real world. So my questions are. 1) On first glance do the figures stack up? I've never purchased a business before so I'm not sure how a business's value relates to turnover or profits. It seems that I'm basically just paying for goodwill. 2) As the machines are all over 4 years old, would these already have been depreciated off in the accounts so effectively don't add any value to the business or do they still have a value as an asset? Brand new these machines are worth €40,000. I'm still in the process of finding out their secondhand values. 3) In my mind a business should make enough profit to repay the investment within 3 years. Is that realistic thinking? 4) Is there anything I should specifically be looking out for in my due diligence? Many thanks and I look forward to hearing your views.