The price seems very good, too good, too low...
If you make 16,000 a year from a business, then the sale price would be closer to $16,000 or more.
But is the $16,000 gross, or net? And have you any idea what his expenses are like? And what are his net profits like? If you bring in $16,000 gross, and spend $10,000 to earn it, then the profit is $6,000, so the price seems fair...
Ask for references. Try check out the accounts. They may not stay with you after he sells.... So verify that the accounts exist, and could be kept by you. Where are they located? Do they pay in full and promptly?
How old is this equipment? Is it in good shape?
What is his reason for sale?
And how... How suitable to this kind of business are you? Can you get the proper licenses/permits and such, if needed?
Are you borrowing the money, or do you have it cash? How is the economy locally? Do you have a vehicle to cart the equipment around?
There are more questions that might be asked, and should be answered, but each of the above, if answered will give you an idea of true value of the operation.
Take a piece of paper and do a pro/com list. Pros on the left side of the page, cons on the right....
Good Luck!
