Selling your business....

[renegade_cowboy]

I see more and more busiesses for sale, be it on CL or where ever. I notice about approx 50-60% of the listing price is the equipment and not the actual operation.

Everyone of you reading this, is going to have to face this decision.. Maybe you will have family take over when you get to that point... but many of us are O/O and might not become more than that over the life of the business.

Some of these businesses have been around for decades and are now getting out... With all that time invested in growing and creating a businesses and to do all that work with no real return in the end is a scary thought. Not to mention some of these businesses takes years to sell.

Any ideas or thoughts?

 

[Desk Jockey]

Equipment and trucks are not worth much, more of a liability than an asset.

Contracts, consistant sales, customer list, property are of much more value than worn trucks and equipment.

 

[Brian R]

You have to have systems set up. A way for the business to keep running during the transition period and to keep running well after.

If all you have is equipment and a customer file you will have to liquidate...not sell your business.

That's straight from the horses (Steve T with SFS) mouf.

 

[bob vawter]

I sold CRASH the ........hood! shiteatinggrin shiteatinggrin shiteatinggrin

 

[Ken Snow]

In most caes a truly oo business like carpet cleaning will never sell for much more than the value of equipment and maybe 25% of sales for the next 2-3 years, and even that is a stretch.

 

[Jim Martin]

I only buy what I can place my hands on and a client list is like buying air....everyone wants big money for something that is not a sure thing....

 

[Doug Cox]

I don't care what you guys say, my job is worth alot of money.

 

[Steve Toburen]

You have to have systems set up. A way for the business to keep running during the transition period and to keep running well after.

If all you have is equipment and a customer file you will have to liquidate...not sell your business.

That's straight from the horses (Steve T with SFS) mouf.

Absolutely nothing wrong with staying small as an owner-operator, Brent, IF you make alternate arrangements for funding your retirement "Golden Years". As almost everyone alludes to above a small, owner run business can be a great lifestyle but likely is not going to provide much in the way of cashing out.

The worst thing is to blithely while away the years and then get "surprised" and depend on Social Security.

Steve Toburen
http://www.SFS.JonDon.com

PS The key is to prepare your business for sale now to move it down the road. (The hidden benefit here is everything you do to make it saleable also makes it a funner, more profitable and easier-to-run business right now!)For anyone who is not too proud to download some information here is how I did it. (My way is admittedly not the only way but you might get some practical ideas.)

http://sfs.jondon.com/2149/resources/sp ... ntual-sale

 

[ascrubabove]

I retired once and can,t wait to do it a second time cause it will be the last. Gonna get some land in the hills and live the quiet life!

 

[Giorgio]

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http://sfs.jondon.com/2149/resources/sp ... ntual-sale[/url]

Thanks Steve!

 

[floorguy]

I don't care what you guys say, my job is worth alot of money.

no chit shiteatinggrin shiteatinggrin shiteatinggrin shiteatinggrin shiteatinggrin shiteatinggrin

 

[amygeorge]

I'm the crazy person that purchased a business based on customer list, reputation and the hard work the previous owner established over 15 years. I think it depends on location and the amount of other cleaners in your service area. I've always said I don't have competition, but I do. We have those bait and switch fellas that drive 50-75 miles from Wichita Falls and a portable cleaner 30 miles away. They get the jobs I don't want when a customer is only concerned with price and I refer business to them often. However, I do not have a quality cleaner anywhere near me and that makes a huge difference.

If I were going to expand, I might not be so quick to buy out an existing business. Not all cleaners deserve to be bought out. Before I bought the business, I trained with the owner off and on for 4 months and my main tech worked with him for a solid month. The previous owner always answers my calls (I don't call often) when I have questions. He also carried the "good will" of the business, so he has a dog in the fight. You've got to know how to price your business, and how to sell it. I know many owners want to sell and walk away - that works if your business is good enough to run without you!

Since the day I bought the business, I've done nothing more than answer the phone. I've still got to develop a logo, get a website and advertise regionally (previous owner did none of these - he didn't have to). It's much cheaper for me to advertise than most of you because many of our papers are weekly. Yes, we still read the paper because we have to know who passed away, got married, arrested, graduated, or had out-of-town visitors last weekend, etc.... I got a call the other day and the lady said, "I'm sure you read that my grandchildren were in town and you know what that means..."

amygeorge

 

[Brian R]

Paper? What's that? lol


Amy, you've got a great thing going there is sounds like.

 

[Connor]

Paper? What's that? lol


Amy, you've got a great thing going there is sounds like.

You probably could, too, if you answered your phone instead of leaving yer customers to Voicemail.

 

[Art Kelley]

I see more and more busiesses for sale, be it on CL or where ever. I notice about approx 50-60% of the listing price is the equipment and not the actual operation.

Everyone of you reading this, is going to have to face this decision.. Maybe you will have family take over when you get to that point... but many of us are O/O and might not become more than that over the life of the business.

Some of these businesses have been around for decades and are now getting out... With all that time invested in growing and creating a businesses and to do all that work with no real return in the end is a scary thought. Not to mention some of these businesses takes years to sell.

Any ideas or thoughts?

Just enjoy your business in the present time. There are no guarantees in the future. Invest your profits, fund your Keogh. If you make a good living, employ people (or not) stay on top of things and kick ass. Live in the moment. If you are running your business to just sell it, you are living for a "nothing sandwich". Chances are the person who "buys" your business will fail and turn your beloved business into "dust in the wind". Just ask Steve T. The guy who bought his business crashed it into the rocks. It takes a special person to successfully run a viable enterprise whether they buy a going concern or do a start-up.

 

[Mikey P]

Buy my Vortex for 20 grand and I'll toss in four of my worst customers and a 37 jugs of slightly used shitty chemicals.

 

[Steve Toburen]

Just enjoy your business in the present time. There are no guarantees in the future. Invest your profits, fund your Keogh. If you make a good living, employ people (or not) stay on top of things and kick ass. Live in the moment. If you are running your business to just sell it, you are living for a "nothing sandwich". Chances are the person who "buys" your business will fail and turn your beloved business into "dust in the wind". Just ask Steve T. The guy who bought his business crashed it into the rocks. It takes a special person to successfully run a viable enterprise whether they buy a going concern or do a start-up.

"Enjoy your business in the near time?" Absolutely. Live every day as if it is going to be your last. (One of my best friends was diagnosed with ALS two months ago and is going down fast.)

A "nothing sandwich"? Not necessarily. Look at Amy. Especially if you have created a Business Infrastructure and sell to a moderately intelligent and motivated buyer. (The fellow who bought my company was neither. BUT he did have one important advantage- he paid 97% cash up front!)

Steve Toburen
www.SFS.jonDon.com

PS There are so many different models to achieve success in this business. Everyone has to choose their own way. I would just humbly state it might be wise not to count on social Security.

 

[Mikey P]

Nice article in ICS this month Steve.


almost a two flusher.

 

[NobleCarpetCleaners]

Actually a 3 flusher, first artical in forever in the "Specialist" I thought was worth a sh... Hope no cleaners in my area can read. Hell, what am I worrying about.

 

[Mikey P]

Tooboring has definitely been stealing all his best material from the World's Greatest Carpet Cleaning Forum.


I was impressed with his hipness in that article.


SFS must be a whole new show from the class I attended just a few short years ago.

 

[Jtuseo]

An owner operated business is worthless in any service industry. For example, why would I buy someones carpet cleaning business or carpet store when I can just start my own. Example buy a van truckmount all the tools and then dump 25k the first year for marketing. Done deal.

 

[joeynbgky]

What if the owner operators business brings in $320,000 in sales a yr? It has to be worth something right?

Sent from my T-Mobile G2 using Tapatalk

 

[Vivers]

I think if you build a great loyal customers list in the thousands, have a turn key operation like, great computer program that shows when, how many, and what each client does, E-mail reminders, mailers, many different service you offer, great maintained equipment and vans, Have a dominating presence online, killer website that closes sales, outstanding reputation online and throughout your county, a company that is known in the area for there quality and charges for it, as well as offering like said earlier a certain amount of time to train and go teach the new owners you can and will get a great number for your biz.

We were offered quite a bit of money 5 years ago to buy us out. I would of taken it if it was time to retire then. I am only 43 so I have more time to work and build the company for it's eventual sale.

If your company dominates your area and charges for it, has a killer reputation, then there will be buyers!

Build it and they will come!

 

[SMRBAP]

What if the owner operators business brings in $320,000 in sales a yr? It has to be worth something right?

Sent from my T-Mobile G2 using Tapatalk

Not if the bills are $319,999.00

All about adjusted net

 

[Steve Toburen]

Nice article in ICS this month Steve.


almost a two flusher.

I'm honored. Seriously.

Steve Toburen
www.SFS.JonDon.com

PS My new editor at ICS is here with us at SFS this week. I'll have to send him a screen shot of your "nice article" quote, Mike. Just need to edit the flushing stuff...

Actually I told my editor last night I have zero formal education in writing- just try to write what I experienced and personally feel plus what I hear from others who are "down in the trenches". He said to just keep it up.

 

[Dolly Llama]

why would I buy someones carpet cleaning business or carpet store

two different animals aren't they, John?
one is a retail biz, the other is a service biz

I'm a dOpe as a business man, but they tell me there are three very important things to a successful retail biz

1. Location
2. Location
3. Location

not that I'd want to be in the carpet/flooring retail biz with such fierce competition from the likes of HD and Lowes...giving away installs and making profit on many goods thru volume sales....
But a carpet/flooring retail establishment with a good reputation, anchored in the same great location for many many years would surely be an asset , no?


..L.T.A.

 

[ruff]

Just enjoy your business in the present time. There are no guarantees in the future. Invest your profits, fund your Keogh. If you make a good living, employ people (or not) stay on top of things and kick ass. Live in the moment. If you are running your business to just sell it, you are living for a "nothing sandwich". Chances are the person who "buys" your business will fail and turn your beloved business into "dust in the wind". Just ask Steve T. The guy who bought his business crashed it into the rocks. It takes a special person to successfully run a viable enterprise whether they buy a going concern or do a start-up.

While Steve, God and JonDon bless his soul and other enterprises, is the BDCC's sanctified marketing guru. He may also be mostly right.

So is art. He knows what he's talking about, does not waste his time running after the latest fad, and is smart. You can't go wrong following his advise.

And though Steve is more of a song and dance man. With Art, you don't even have to pony up for the horse and pony show

 

[Jtuseo]

Larry its a retail/service business , because you are also doing the install. Now adays the location is less important. They Google carpet installers and you go to give an estimate in home. Its very similar to carpet cleaning except you are also selling a retail product as well.
I just feel as an o/o the business is so unsellable. I have been through it selling and buying business's. I would never ever buy someone's business again, I would always just start its from scratch by saving ym money first. Restaurant to carpet cleaning. My father owned restaurants and he always said if the business was making a profit they would never be selling it. I learned the hard way on that. I swear by those words now. It is sooooooo true.

 

[amygeorge]

To buy and existing business or start one from scratch, both sides are debatable. I love the fact the owner turned the keys over to me and we've been busy ever since. It would have taken years and $$$ to have the business running like mine did on the first day. It has worked well for me.

amygeorge

 

[Desk Jockey]

I would think you'd always be better off buying an existing business and hit the ground running as Amygeorge has.

That is provided the company has a good reputation in the comunity and has a book of business worthy of purchase.

New start up is tough without the cliente, lots of upfront money needed to buy your way into the market place in order to generate sales.