Just enquiring wether anyone has been through this ? Now that the kids are growing up a bit me & Mrs. Large are considering upping sticks & moving, to near Capn. Leaky's neck o the woods atually. I'm a one man band who's business has been established for ten years or so & makes me a good living with loyal customers & without any advertising. I was thinking I could probably sell the company & use the proceeds to tied me over whilst I establish myself again in the new area. Just wondering if anyone else has done likewise &,if so, how did it go for them.
As a rule of thumb it takes three years to get established properly in a new area, budget for advertising, decent sign writing etc.
Interesting thought. . . Have wondered before how you can put a value on a sole traders' business in order to sell it. If, as you say, all your customers are loyal, and your custom is word-of-mouth recommendation, are they really going to want to put their trust in someone new who's just stumped up the readies to buy you out? And would you want to betray their trust by handing over to any old muppet with money? Hmmmmm (rubs chin). Would be interested to know how you get on. . . . . John.
More pertinent is would anyone pay to buy your business? Not being sarcastic - just asking the question.
I don't know Capt. It's just putting ideas together at this stage. My Dad sold a business some years ago, a fish round of all things. Essentially that was nothing more than a list of customers & a van. The way I see it is that there are many would-be plumbers out there striving to get into the industry, cc's or ccc's or whatever, so an established customer base must have a value.
When bigger companies (not huge ) are sold the value is based on their customer base: - how much does your customer base earn you? - how much are realted running costs? - what is the gross profit? You might need to see an accountant, or business adviser to get more information, but the same rules must apply. If you have a business (say) that makes 80k a year and with a profit of 50K, you might find that there is a formular to work out your business value - maybe your profit x10 or the like (it is hard to say with a one man band). There must be value of course, but further advice would be needed. Go to the bank, and speak to a business manger there, and ask how a business's value is calculated. Ps (are you being polite Mr Leaky, or are you avoiding any arguements on purpose, to aviod the wrath of adimn falling upon you???)
goodwill for a buisness is going to be hard to cost. I can tell you that its 6 x gp or 1 to 1.6 x turnover, depending on the size of the turnover in my game. But hat gives the purchaser exclusivity, nobody can set up in compatition. Why would anyone give you any money, what are you going to give them? Stock? Van? Trading company name? Would you spend time going with the purchaser to introduce him to your customers? Could you take on a partner on a part ownership basis were you keep 20% of the profit for three years, in exchange help with paperwork, trade accounts etc, and after the 3 years you give up your interest? I knew a heating enginer who retired after a life time of looking after oil boilers etc. He was very popular and dominated the local area, doing all the buisness. He was unable to sell as "a going concern" He got a small amount of money for his list of names, could not even sell is spare part stock! My advice to you would be if you are doing ok, espesialy in this economic climate, stay were you are until you retire, then move north were you get a lot more for your money. When you live in the north with prperty prices so low its difficult to understand why people will pay so much to live in London etc.
My Dad sold a business some years ago, a fish round of all things. Essentially that was nothing more than a list of customers & a van. Thing is that was a business that most people could probably do, no actual physical skill invilved etc. With your plumbing, your customers trust YOU not to flood their house etc and do a good job at a good price. Good luck Thanguveramuch-EP