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I love my business and I am doing very well financially. I was not planning to sell until I received a letter from a local guy wanting to know if my business was for sale. Since this is a rare opportunity, I am afraid to pass on it. The biggest problem I have is trying to find a fair value. Does anyone know a formula that is used to calculate the value of a service business? Thank you in advance!
What ever this guy will pay you, I will pay double. I only have a few conditions.
First. You must continue and do all the work
Second. I will take all the profit and any bonuses
Third. I will be known as your “Master” and refered to as such
Lastly. and most importantly, Do Not Talk to Ferris as he is a “No GoodNik” and a Bad influence.
Lol! Sounds like an offer too hard to pass up! I’ll run it past my wife because she is the real boss!
And while you are at it, find a buyer for mine. Better yet, you can come work for me!!!!!! LOL
Hey Sutton
A couple things
Pie in the sky aka “potential” is worth Zero. Notta. Zilch
A business with employees is worth a lot more than a owner/opperated one.
From a buyers perspective, If you take yourself out of the business, what is left?
When you take your gross revenue and subtract your costs, your labour or someone elses and then any “carrier” costs. Whats left is PROFIT. Thats what a buyer should be looking at. And that’s what a buyer will (or should) base they’re offer on.
As always YMMV
D
If you know of Dave Ramsey, he says this:
Business’ income
– (minus)
Expenses
–
Living wages for you (what you can life off of)
=
Profitthen
Profit
x (times)
5
=
Value of the businessBut that’s just what Dave Ramsey said. I don’t know.
I am selling my business. I have been offered 40,000 plus he pays for the training cost and I keep my old van (not worth much but I might get a couple thousand out of it.) If I had time, I would wait, but just have to take what is offered at this point. My thinking is this. To buy a new franchise it is something like 25,000. That comes with one set of equipment and some products. I’m not sure of the total value of these. But With the franchise you must buy a van. So with that said, 25,000 plus the van, mine is worth about 15,000. That puts the value of a brand new business with out the extra equipment that I have, and without the customer list at 40,000.
From my meetings with the guy who is buying my business, the franchise really isn’t worth a monetary value. He said the customer list isn’t really worth anything either. If that is the case then I am getting a good deal. However, I did ask him if I could keep the customer list since it wasn’t worth anything. That was a no. Don’t really remember the answer to the question of why he doesn’t just go buy the equipment and product somewhere else.
All in all, I think the customer list and the franchise are what you have to sell. The equipment can be bought somewhere else. And if they don’t care about quality they can buy their product somewhere else.
Basically I’m just talking out loud. To me, the guy is getting a spectacular deal. To the buyer maybe he sees it differently right now. But I think if he truly is worried about if he got a good deal, he will be amazed in a short time just what a great deal he got.
Let me know what you think and if anyone wants to make an offer over 40,000 let me know ASAP!
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