[robbie]

advice please making career change  have been offered opportunity to take over an established carpet cleaning business I am going on courses etc prochem host and ncca in future  I am prepared to commit to this but worried about initial outlay approx £25k for business, includes several bits of equipment , also van
mainly uses host. business been going over 10 years, how do you price the customer goodwill, etc,etc, hope someone can give me some advice please.

[Dave Parry]

Robbie, as this topic has been read a few times with no answer, can I suggest you fill in you profile, people may then be prepared to help.

[Karl Wildey]

Whats the business turnover?
What equipment do you get with the 25K?

Equipment is easy to get, it just takes money, clients and more important turnover/profit are harder to get, so if you are buying 40k of euipment and 10k of turnover, you arte being robbed, however if it is the other way round then you may have a good deal.

This is an example for robbie, don't all start posting about how much he should pay for my example, and Robbie fill in your profile and you may get more help

[Len Gribble]

Robby

What on the order books? That’s speaks volumes! And will the stay with you knowing of the sell out?

Goodwill ant worth the paper it’s not written on.

Data base 12k how many repeats/referrals.

Equipment need, age and services history probably nanked.

Run the data supplied via seller to your account!

You may be on a winner?

Would like to see your profile.

Len

[mark_roberts]

I take it you know very little about carpet cleaning.

You need to know that the host system is very little used by cleaners due to it being more of a maintainence cleaning system and more so for commercial carpets.  i would look very very carefully at the type of business the current owner does and the hours worked esp if commercial.  It may not suit you.

I would say £25k is cheap if its a well run business and if its 10 years old should be driven on repeats and referrals. 

Whys the owner selling.

Mark

PS. would you let the current owner into your house alone to clean your carpets.  If the answer is no then walk away fast.

[robbie]

sorry guys I hadnt entered profile found this site by chance, wife very concerned in case we make a big mistake , we have decided to get an accountant to look at books , seems to be looking at retireing  owner says apart from a few larger contracts ie:care homes once ayear then you tend to be booked on a week to week basis? a mini profile 24 years royal navy been out 8years  went straight into production manager job to much pressure in the end willing to work hard but be in control. oh and be able to spend abit more time with my 3year old!! lifes begins again!
thanks for any replys

[Karl Wildey]

accountants talk money, you still wont know if the equipment is worth anything, these guys on here will.
So once your accountant has done his sums, come back on if you need further advice.
where you are?

[Chris Bailey]

Hi Robbie

Speak to Prochem, Host etc and find your local distributor/reseller who can have a look at the equipment and give you a true guide as to the value and condition of the equipment, this may cost you a few hundred pounds but if you have already taken on an accountant then you are willing to spend a little money before you part with £25K and that’s good.

These assets of the business should not be the bulk of the asking price for a 10 year old business, as Len said goodwill is a waste of money, the most important asset is the customer database, if there is one.  This may be a file full of invoices/survey forms or if you’re lucky a software database will all previous work done.

If there is a database then how much of it is repeat business, how many regular customers does he have other than the commercial contracts.  Are the commercial contracts and handshake or in writing?  If it is a handshake then it’s not worth the paper it’s written on cus they might not like you and source someone else.

Think outside the box, if the database is not there and you have £25K to spend then start up yourself from scratch, get trained, get the latest equipment, van etc then start marketing using leaflets and in twelve months time you'll be in the same position as if you have bought this business IF you work hard enough.

It’s not easy in the beginning but can be worth it and this forum can be a wealth of knowledge and information

Best of luck

Chris

[Michel Roberts]

Robbie

I agree with everything  chris above has just said.

For £25,000 you could set yourself up with top of the range brand new equipment  and everything else you need.

The host system is not much good as a main meathod for domestic carpet cleaning, just search and see how many of the serious pros on this board use it as their main meathod hardly any. Most use HWE

For approx £800.00 you could buy a envirodry E40 which will do much(but not all) of what the host will do. Another £3000.00 will get you a good hwe machine.

The ongoing contracts might make it worth that money but they do need to be proper contracts

As for the work coming in on a weekly basis, maybe it does, maybe it does'nt. If you only have his word for it I would be very doubtfull. After all he would say that would'nt he.

Why don't you check the start up or frequently asked questions sections on this web site and also  www.another forum.co.uk   
www.cleantalk.co.uk

Michel

[robbie]

on behalf of rob thanks everyone rob is on a 1 day course with host today rob has been out with this guy a few times and seems quite impressed.
lady of the house seems to be in control as such but is suffering from ill health and we are treading carefully we do not want to lose a good opportunity , but do not want to make a mistake a family member is lending us the capital as such,we are trying toget books so acct can look over them but these are not being offered very easily? the agreed date to takeover is only 2 weeks away but doesnt look like this is going to happen without these details I think there is a data base I think it is all kept very simple and mainly oap community advertises in local parish mags. thanks again  robbies wife.

[Chris Bailey]

Hi Robbie's wife

Don't exchange until you have seen the books!!!

And if I was you I would be wanting to buy his telephone number!!

Arish mags are on of the best, oaps are a good source of income.

Two weeks is not long, you should postpone this.  I nearly bought another contract cleaning company 12 months ago, I pulled out with two weeks to go, it took me 4 months to get to that stage....SO DON'T RUSH INTO IT!!

All the best

Chris

[Dave_Lee]

Robbie,
Sorry to be pesimistic, but listen to the experienced guys on here, I know its easy to get carried away when keen to start a new venture, but dont live to regret it.
Personally from what you have said so far, if you can get your hands on £25000,
I think you could do a whole lot better. What you need to find out is, what his database's average job ticket is. i.e. how muich per room or square foot/yard, 3 piece suite has he been charging. If his regular customers have only been used to paying a low price, and you go ahead, you will not be getting time off to enjoy with your family, you will running round like a headless chicken from job to job and making very little money in the process. If however his pricing has been on the high side, then thats another matter, but you will have to do some clever transfer marketing to avoid losing more than half the database, which WILL be lost when the business changes hands.
Dave.

[robbie]

thanks chris,actually meant to say I dont think they keep a database, he has said willing to take rob around alot of his clients,they dont charge high in fact quite low, if we gave you details of equpment etc could you give us some advice.we are at least 250 miles away from you.

[Karl Wildey]

Sounds like you need one of these guys to look over the equipment cos, you are relieving on the clients becaming yours and at a low ticket price.
I am beginning to think that you are both excited about owning your own business and think that 25k is cheap.
Setting up in cc is cheap, its keeping the business going and that is all about being business like and marketing. Neither of the last two are in the 25k.

[Mark Roberts]

From what you say I would tread carefully. Looking at the books is a must. If they are not turning over more than 50k a year I would beat them down on the price. Some say a business is worth half of what you turn over a year.

And without a database to remind people to use you that figure is looking a bit high.

On the other hand it might be a really nice name to take over. Have you asked if the telephone number is included, that would make a good selling point so excisting customers can contact you.

Mark

[Len Gribble]

A lot of sound advises given.

Sorry to rain on your enthusiasm a bit more, when you say the seller will take Rob round to his clients, by that I assume you mean commercial?

If Rob’s heart is into buying this business get on a HWE course, I take it that this type of machine comes with the business?

Do a staged payment system!  Remember you are not buying a window cleaning round.

Already mentioned phone number/s also web address would be nice.

Len

[robbie]

Had a good day at host met alot of experianced guys with good advice, telephone number is to be included with business and owner is prepared to spend as long as necessary with  me till I am up and running properly has only 1 customer that is hwe  apart from the upholstery side of the business thanks robbie

[Ken Wainwright]

Even if the seller has a good reputation, the goodwill is not worth much at all. If he has a poor reputation it's worth zilch.

For myself, I consider my most valuable asset to be my phone number.

Safe and happy cleaning
Ken

[Len Gribble]

Robbie

And what advise did you get from attendees on the course?

Len

[Shaun_Ashmore]

a 2nd hand van, and good equipment will set you back say £7 or 8K and spend the rest on leaflets you'll hit the floor running.

Shaun