[dave washbrook]

hi all

i have just been offered another cc business it includes a new van and a hm421 tm it has a annual turnover of 55k  but how much is it worth

any advive

thanks

dave

[DanielWelford]

Is it usually 3 x turnover? Works out a bit much though. Obviously will depend on how many years it has turned over at that level; profit/loss; audited accounts etc etc.

I used to be a Bank Manager (for what thats worth these days); if you are really interested spend some money on a good accountant to take a look at the business. Emphasis on GOOD!

Dan

[dave washbrook]

the bussiness has been going for 18 years and has been about the same for the last 5 years

thanks

dave

[the red carpet]

55k turnover is just over a grand a week.

I certanly wouldnt dream of giving someone 3 x turnover for that (£165.000)

For what? to earn £500 quid a week.

[carpetclean]

i would be very wary buying a business that has only 55k turnover it does not sound a great deal to me . check the repeat work and as someone else said get a good accountant to look at the books

[Mike Halliday]

how much is the equipment worth?are you getting all the telephone numbers? how much does he charge( you don't want his business if its customers are expecting suite cleaning at £40)

most carpet cleaners keep their old diaries, these are a true indicator on how a business is doing

 if the equipment is worth 20k then he wants 35k for his customers, if you spent 35k over the next 5years (7k a year) would you increase your business by more than the amount he is offering?

Mike

[jasonl]

I would say  tangible asset value, plus 5-10 grand depending on quality of work.

[dave washbrook]

hi all
 
thanks for your replys, the reason for sale is he is retireing, the business has been established for 18 years, nearly all his work is repeat or referals, he has a small yp add, he does have a database, hes not vat reg, hes showing 45k and says he does 10k cash, after all expenses and self wage he's showing aprox 14k,  the area he covers would mean a lot of travelling for me, discussed with my account today who says he is asking too much.
 
 
the van is 6 months old and the tm will be brand new in december why he is putting new equipment out i dont know. he has no written contracts he wants 75k
 
please advise me further
 
thanks
 
dave

[Shaun_Ashmore]

£75K No way

They say a change of owner can lose upto 10% of a businesses turnover, also in cc repeats tend to buy again from the cleaner they liked last time even if he comes with a different machine or methods so in a nutshell they 'buy the person.'

Value of his assets at point of sale (a van and machine 1 year old will be worth much less than when he bought it) plus say £10k good will, you need his telephone number transfered onto your line and a database of customers (providing he hasn't made them up!)

£30k tops

or you could set yourself a £30k marketing budget over 4 years and make your own database.

Shaun

[the red carpet]

I would rather the £30k marketing budget, that way it will be the customers you want, in the areas you want, at the prices you want, and they will be buying you.


Also if your allready in the buisness you will know what works and what dosent for you in your area, so you shouldnt be wasting the budget, like most of us do when we start.

I take it you are one of the first people he has offered it to at that price, and i can see why he thinks its worth it because we all work so hard to build our little empires, but my guess is after a while he will get deflated at nobody being interested at that sort of price and his expectations will come down along with the price.

It wouldnt suprise me if he ended up selling the van and t/m for there true value and just passing the work on to there new owner to be nice. His best bet is just employing a young tech for a couple of hundred a week, and keeping the rest for himself.

ps, no disrespect to the guy
but imo £55k a year is a job not a buisness, it has very little re-sale value

[jasonl]

I would say 25-30k depending on make/model of van/equipment.
I sold a Chem dry franchise with 150k plus turnover, 30 k of vehicles/equipment for 75k  over 4 years ago.