[Ian101]

In the last 3 years I have seen the selling prices go from 3 x the monthly to 7 or 8 x the monthly in my areas.

i know for sure as i have both bought and sold at these prices.

Will they get to 10 or 12 x the monthly ?? .... cant see it myself.

Mosy buyers when 3x the monthly happy with a handshake and gut feeling when handing over money i rekon to get to 10 /12 the monthly they would want to see contracts but who has a contract on a residential customer and even if they did customer can still cancel.

[Ian101]

At 10 /12 the monthly defo a good idea to canvass, clean a few times and then when all settled sell it on.

Thought about this a few times but cleaning windows a lot easier if boring though 

[Moderator David@stives]

I bought my first rounds, one for £500 and one for £3000

Even if half of them cancelled it gave me the foundation to grow my business to the size it is now

What is that £3500 worth now,

How much have i earned off that £3500 ?

You got to look at the bigger picture, the money you pay for the round does not dissappear

[Rayleigh Window Cleaning Services]

Buying work will always have an element of risk, after all you are purchasing a lot of good will.
In my experience for what its worth I have only bought work once, and the reason I did was because it was in a very affluent area, very compact, I already had work in the area, priced fairly and I saw the potential.
I got this work in 1998, so fourteen years ago and in that time apart from death or moving kept most of them and it led to getting more work.
I voted yes as in my case it more than paid off.

Steve

[Perfect Windows]

Here goes with a bit of controversy - people on here hate maths, so I expect an attack.

Buy £1,000 of monthly work for £10,000.

Rent it to someone for 20% of turnover (the going rate in my area).

You get back £200 per month, or £2,400 a year for your £10,000 investment.

You still have £10,000 worth of assets (i.e. you can sell the round on) and you've made 24% on it without doing a stroke of work bar banking the renter's cash.

A quick look around finds the best cash ISA paying 3.3%

Suddenly 10x looks VERY cheap.

Vin

[Steve Sed]

Here goes with a bit of controversy - people on here hate maths, so I expect an attack.

Buy £1,000 of monthly work for £10,000.

Rent it to someone for 20% of turnover (the going rate in my area).

You get back £200 per month, or £2,400 a year for your £10,000 investment.

You still have £10,000 worth of assets (i.e. you can sell the round on) and you've made 24% on it without doing a stroke of work bar banking the renter's cash.

A quick look around finds the best cash ISA paying 3.3%

Suddenly 10x looks VERY cheap.

Vin

No, because your asset will be dwindling with customers dying, moving etc.

[Moderator David@stives]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

[Steve Sed]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.

Nothing wrong with buying rounds in principle.

[Perfect Windows]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.

Nothing wrong with buying rounds in principle.

Why?  Because you make that a condition of his renting the work.  A sane man wouldn't rent a round on a  nod and a promise; there'd be an enforceable contract.

Vin

[Perfect Windows]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

The same maths would give a 42% return.  Even nicer.

Vin

[Steve Sed]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.

Nothing wrong with buying rounds in principle.

Why?  Because you make that a condition of his renting the work.  A sane man wouldn't rent a round on a  nod and a promise; there'd be an enforceable contract.

Vin

A sane man wouldn't rent a round where he is expected to pay 20% on work that you don't have. Why would he pay you 20% on work that he has to canvass himself? You would have to replace the work for him.

[Moderator David@stives]

Steve

you put into the contract that if he loses one of yours he replaces it, I am sure both parties would agree that from the start, even so it wouldn't be that hard for you to replace a couple yourself to keep the agreement rolling.

[Perfect Windows]

not if all lost customers have to be replaced by the rentor,

i would go for 35% myself

Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.

Nothing wrong with buying rounds in principle.

Why?  Because you make that a condition of his renting the work.  A sane man wouldn't rent a round on a  nod and a promise; there'd be an enforceable contract.

Vin

A sane man wouldn't rent a round where he is expected to pay 20% on work that you don't have. Why would he pay you 20% on work that he has to canvass himself? You would have to replace the work for him.

Bear in mind that they might well not actively have to canvass new customers; you know as well as I do that you get stopped and asked just by being out there.

Also it depends upon the deal you're selling.  If you are renting the round on the basis that they replace, then they can either take the deal or not.  You might not take it; doesn't mean no-one would.

You're seeing the negative.  Try looking at what's in it for them.  Perhaps they would see that they get a round th day after signing without needing any capital or any time to build up and consider it worth the 20% (or 35%!) and the need to replace any customers they lose.

Vin

[Steve Sed]

You are getting closer to franchising or employment than renting in that case. My understanding of the way renting works is obviously different to yours. If I was "renting" I would not expect to pay "rent" on work that I have picked up. I think it is the word "rent" or perhaps my understanding of it that is the problem in the scenario you describe.

[Perfect Windows]

I agree that you would never rent on that basis as you've got the drive and capital to build up a round of your own.

For someone with just enough cash to buy a van, he could speak to the renter on a Friday and start cleaning a full round on the Monday.  Plenty of people would pay 20% plus "replace all lost customers" for that deal, as they would have cash flowing into their pocket in three days.  Much better option than starting from cold.  They might keep 100% of turnover starting out alone but it's a daunting prospect (as you'll remember from when you started).  It also might be a year or two before they were any better off starting on their own.

I should point out that I won't ever be renting work; I only used the point to give a basis for pricing.  Too much is posted on here as though it's based on some magic formula when there's no logic to it.  I include "3x - 4x monthly to buy work" and "£1 a window" in that kind of received wisdom.  I was trying to highlight something that shows 10x to be pretty good value for the buyer who does it right.

Vin

[robertphil]

whatever you pay,its a  positive, you are getting a foot farther up in the biz.   whereas keeping your money in the bank doesnt get you anywhere far

[Steve Sed]

I agree that you would never rent on that basis as you've got the drive and capital to build up a round of your own.

For someone with just enough cash to buy a van, he could speak to the renter on a Friday and start cleaning a full round on the Monday.  Plenty of people would pay 20% plus "replace all lost customers" for that deal, as they would have cash flowing into their pocket in three days.  Much better option than starting from cold.  They might keep 100% of turnover starting out alone but it's a daunting prospect (as you'll remember from when you started).  It also might be a year or two before they were any better off starting on their own.

I should point out that I won't ever be renting work; I only used the point to give a basis for pricing.  Too much is posted on here as though it's based on some magic formula when there's no logic to it.  I include "3x - 4x monthly to buy work" and "£1 a window" in that kind of received wisdom.  I was trying to highlight something that shows 10x to be pretty good value for the buyer who does it right.

Vin

I think 10 x is ok if you are buying work and absorbing into a round with multiple vans. As long as the work is well priced, it will increase the value of the business and profit.

[Crystal-clear]

its true vin , the return would be amazing , nothing would give you that return but we cant look at it as simple as that! , cancelations , the renter might muck it up etc etc, however its ture if one could make it work 10x wouldnt be alot, the main reason why i wouldnt pay 10x is because you are entering the unknown and althou it could pay off there is no guarantee and 10x is too great the risk should poop happen ,, i think 3-maybe 5 times max is worth the risk!

[PoleKing]

Nope, think how long you'd be working for to regain it. If you spent all that time canvassing properly (where I am anyway) you'd be quids in.
Not to mention (personally) I'd feel more secure knowing I had a wedge of cash in the bank I could lay my hands on.
Only my 2p's worth though

www.laneswindowcleaning.com

[andrew hamshare]

Would neither buy nor sell my hard earned round for 10x, not even 20x for that matter.