How Much Could You Sell Out For?

I thought there was a thread on either this site or somewhere else about 3 or 4 years ago that talks about this but I don't remember too much about what was discussed.
 
low book of assetes + 1-2 times your net depepending on the competition.

for instance a lawn care company would be one years net due to the low start up cost and large amount of competition.

Services businesses are worth less than brick and mortar businesses do to ease of start up.

The real problem with trying to sell a power washing business comes down to systems. If you have no systems, and know employees who are also assets the really all you are selling is assets. Which normally go for low book value.
 
It depends on the day and the cash. Right now, my business is pretty valuable. I would have to get 7 figures just to think about selling.
 
Thats pretty Interesting, thats why anuity is the way to go, contract payroll in escrow so its a guarantee. You could have avoided all that controlled every dollar. Sorry to say you had a bad tax attorney or the problem might have been you didn't have one?
DJ Carroll said:
Also don't forget the tax implications.

I was working a deal earlier this year on a buyer for EasyPro once I seen the number that would be coming off the top in Capital Gains Tax I quickly reconsidered!
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I've sold three businesses. DJ is spot on with his assessment on value. And it can fluctuate wildly depending on the economy at the time. Shelly was only able to get 6 months net on her business because it was in the midst of a huge slump. And she had the systems, the contacts and steady (5 yrs +) bulk customers, but it still didn't help. We had it for sale for almost a year.
 
Ron Musgraves said:
Thats pretty Interesting, thats why anuity is the way to go, contract payroll in escrow so its a guarantee. You could have avoided all that controlled every dollar. Sorry to say you had a bad tax attorney or the problem might have been you didn't have one?
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Could you elborate? I started the company with $300 and all of our assets are completely exhausted as far as deductions are concerned. It basically would have been looked at as all profit.
 
DJ Carroll said:
Could you elborate? I started the company with $300 and all of our assets are completely exhausted as far as deductions are concerned. It basically would have been looked at as all profit.
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Sounds like you break the selling price into payments so there's no lump sum and have the revenue from the contracted work held in escrow so you know you will be paid??
 
DJ Carroll said:
If someone wants to buy EasyPro it will be a straigh out done deal.

I have had several interested in buying but want me to hold the paper. No Thanks
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We held some paper on every one of them. It gave the buyer confidence in the value and encouraged us to ensure their success. The contract was written where we took half up front and the business would revert back to us upon the first missed payment. We documented all our participation in the training with email summaries, pictures and videos for proof of our efforts towards their success in case they tried to claim we failed on our part.

It worked well. If you ask any of them today they will all say the whole process was fair and even fun. Even though one of them has practically run the business in the ground.

We always reinvested the money right away so tax consequences were minimal.

But we were moving up from one business to another. I guess when I reach retirement age like you DJ and just want to get out I'd have to take a different approach. Lol.

Sent from my DROIDX using Tapatalk 2
 
After this crappy day I value Starbrite at a doller two fifty
 
Be careful about hiring a professional. I hired one for Vegas Valley Valet Cleaners. He was charging me $18k to help sell it with a one year term agreement. In exchange for that he advertised the sale in two places in the middle of about 50 other businesses he had for sale. He already had the ad block paid for. After a month he never returned my calls.

At the 10 month mark I called him with this message "I found a buyer for the business".

THEN he called me back and wanted to "meet" the buyer. (to ensure he got paid his $18k)

I told him met the buyer by talking to one of his delivery drivers and following him back to the owner's office. The owner wasn't looking to purchase another business, but I was able to convince him it was worth his while. The guy demanded his commission. I told him I'd be glad to pay him for our portion of the ad space, but he had really done nothing to deserve $18k and hadn't even returned my calls in months. I got no where with him but a threat of a lawsuit.

So we delayed the sale for two months and I didn't send him jack for his ads and never heard from him again.

Just be careful with these guys, they will tie you up so you can't sell it yourself if you're not careful.
 
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