View Full Version : How would you put a price on your company?
Twista616
03-09-2009, 05:49 PM
Another thread for opinions...
If you read my other post about "moving the business"...this is an addition to that post...
Anyway...how would you put a price on your company? I was thinking of selling it, taking the money(if any) and put it in the bank! Im conservative when it comes to money.
I have a fairly large client base, website, P&L`s and product and equipment. I was out of my house, so, no trailer or anything.
I`m just clueless on how to price it, and where to post it sale!!
Thanks alot!
imported_Detailing Technology
03-09-2009, 05:52 PM
Balance sheets over the past 4 years. Though late 08 and early 09 has changed the game.
Figure a 40% attrition rate of clients and revenue from the best year and start bidding.
You should hire someone that can help you sell it. They`ll have forms to fill out and ask a bunch of questions and will tell you what to ask for it. They usually take a percentage like a realtor would.
When someone I knew sold out, the buyer came up with his price buy taking net assets at fair market value (all the assets on the balance sheeet at fair market value minus all the liabilities ie loans and payables) plus nine times net income for the past year.
I don`t think I would have stopped there but that does give you a starting point.
Twista616
03-10-2009, 12:11 AM
When someone I knew sold out, the buyer came up with his price buy taking net assets at fair market value (all the assets on the balance sheeet at fair market value minus all the liabilities ie loans and payables) plus nine times net income for the past year.
I don`t think I would have stopped there but that does give you a starting point.
thanks bert...that does give me somewhere to start!
Lumadar
03-10-2009, 01:38 AM
different industries have different capitalization rates, but that is generally the idea. In other words, typically an industry standard would be for example to take 4 years worth of revenue, and that would be the price. Other industries might be 2 years, etc
For the detailing industry it might be hard to find that data since there is such a wide range in company make-up and services provided. Also, many detailing businesses are built entirely around the knowledge and labor of 1-2 key employees, so selling "the business" without a promise to have that labor and knowledge still available might be very hard to do.
imported_Jakerooni
03-10-2009, 07:55 AM
Do you have interested parties willing to buy the company?
Twista616
03-10-2009, 12:56 PM
Jake, no interesting parties that i know of...I just threw the idea out there, to see if anyone has done it. and how to put a price on it. Other companies are more predictable. My investment wasn`t much to start this company, so I wasnt sure if my return would be worth it.
I remember back in the day, "Glitz and Gloss Auto Detailing said he was selling his company, i should see if i can find an email or something and ask him. ANyone know who im talking about?
EDIT: I`m trying to make a huge sum of money on the sale, but if its a nice chunk, I would consider.
imported_Jakerooni
03-10-2009, 01:08 PM
well the simple way to determine it is by dividing your assest by your liablilties. As long as the assests are more than the liablilties you`re good. The other part you need to consider is are you trying to sell it as a turnkey operation? If so do you have everything clearly laid out so the new owner can just jump right in and start making money? You may not just get other detailers looking at this. You might get a couple of entrepenures that have some bank roll they really want to invest with. These types will obviously not be able to just jump right in and keep your current clientel happy. The more you lay out the better off your going to look to potential buyers.