Consulting Rate for Owners after Transition Training

December 06, 2023

by a searcher from University of Houston, Downtown in Houston, TX, USA

Hi Search funder community,

The business I am under LOI is heavy dependent on two owners. One responsible for the administrative tasks and the other on operations and outside sales. There's capital to hire a general manager to support me with the gap once business is acquired.

I've proposed a 2 month training at no cost under the LOI with an additional month to be paid with an hourly fee. Please share suggestions on how much this hourly rate should cost.

I am proposing a $35/hour
This business is in the residential home remodeling business

Reply by an investor
from University of Puget Sound in Seattle, WA, USA

I'd echo James and Shaun, but would also focus on how much their staff/business is making. Here in Seattle $35/hr is close to an entry-level wage in a lot of construction fields (I saw a nearby McDonalds starting at $25/hr recently). We acquired a small bolt-on two years ago where we paid someone $40/hr for about 6 months (40-hour weeks), but his business was only doing $150k SDE/yr. I'm sure someone used to running a $1mil EBITDA would need much more compensation to stay interested.

Reply by a searcher
from Millersville University of Pennsylvania in Mantua Township, NJ, USA

I don't know about the rates in your area or where this business is, but I can tell you that I don't know many business owner's who'd be willing to get less than $50/hour for consulting after the sale. I'd say most are $100/hr or more. The LOI I have signed right now is for $150/hr (this is for my second acquisition)

+3 more replies.

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