Hi Trevor,
I do not think that my busines is over valued, I feel that my business is under valued as are a lot of other window cleaning business for sale.
I have read some of your post before reguarding value of window cleaning business and they make very good reading.
You metioned in one of your posts that when you buy a domestic window cleaning round you are only buying the good will of the customers, I agree with you however, when you buy any business ( unless there are assetts ) you are buying the goodwill of the existing customer base. It is upto the buyer to keep these customers happy.
The turnover for my business next year stands at £39,000. My profit before tax is at 96% as I work alone and all the work is local and it takes me ( i am 50 ) about 25 hours a week trad. Last year I increased my business by £10,000 with very little effort.
I am offering for sale a one man business with a forcast of £49,000 for next year for £12,500. I do not know of any other type of business you can buy with those sorts of figures for such a small amount. The most high risk business to buy is a building company even these types of business go for about half the yearly turnover.
I have build this business over the past 20 months and I am very proud of the business I have created and the quality of cleaning I provide, anybody who buys this round will have to have very high standards or they will lose customers, as with any business quality counts.
This is a genuine business I have for sale and the person who buys it will have an excelent business with an excelent reputation for a small cash investment.
One thing I have found in business is to know your own value.
I hope I have answered all your questions Trevor.
Thanks
Sean
Hi Sean,
Thanks for your reply, likewise it makes intersting reading and nice to see a view of the sellers perspective.
I look at it this way:
I pay you £12,500 for a round that currently turns over £39,000 - this is equal to 32% of the turnover.
Breaking this down as a business venture you then look at your monthly income generated from this round = £3,250.
That means that based on this income you will work for 4 months before your break even is acheived on just the investment.
This has taken you 25hrs a week for 4 months. So during these 4 months you will also need to draw an income, now lets say the average income is £400 per week which over 16 weeks is a net worth of £6,400 so you will now need to work your round for another 3 months to recover this cost. Add to that petrol, insurance, collecting, equipment and any other business costs your now at the 8 month point before you can look at your investment and expect to start making money.
Now over 8 months I believe it is fair to expect some cancellations due to moving house, deciding not to continue etc....
So my reason for asking about your investment is that I agree you should ask for as much money as possible but from a purchasing point of view there are more things to consider when buying a round than simply to cost. As the owner of the round when you gain a new customer that is instant profit for you as the owner, as the purchaser if I have paid 3 or 4 times the monthly value I have a lot of work to do on the hope that she doesn't cancel in the meantime.
As for contracts, what I meant by this is that on commercial contracts you have a specified term along with certain proceedures to ensure you retain this work. Poor work has to be rectified in a given time etc... which gives a purchaser an opportunity to keep his work, as with a domestic customer who may and be quite entitled to say, NO THANKS! leaving you out of pocket. So with a domestic round you are buying faith and goodwill that you can keep this round without cancellations as you have no Guarentee's
I hope you understand my view now and like I said before, its just a purchasers view. I appreciate all the hard work you have put into your business and from experience I know to keep a good solid customer base is no easy task, so hats off to you for that.
regards,
Trevor