Buying an existing Mobile Detailing business?

[Secret Chimp]

Just this week I was approached by a guy who has been in the mobile detailing biz for about 20 years in my area. He recently decided to sell his business so he can be free to move out of the state. He has a VERY solid client base, some of which have been with him for over 15 years. He does 100% detailing and 0% washing. So he pulls in good money. I'm seriously considering buying him out.

If you have ever bought out an existing detailer, I'd like to hear your opinions. Specifically, how did you come upon a fair buying price and how it all worked out 6 months after the purchase. How did you get the money to do it?

This purchase could bring me easily up to 50-60 hours of mobile detailing work each week.

I realize there is a topic similar to this on the forum currently. But in that thread the individual is only buying a client listing. In this possible deal I am not only buying his client list, but also his name, processes, products, possibly his vehicle, and an option to become a 1/10th owner in a car detailing/ training facility.

thx.
SC~

 

[TrueDetailer]

Just my opinion but i would never buy an exsisting (sp?) business. The money that you would spend you could buy your own equipment and spend a few weeks getting your own customers. :cool

 

[silverline]

Just my opinion but i would never buy an exsisting (sp?) business. The money that you would spend you could buy your own equipment and spend a few weeks getting your own customers. :cool

I would have disagree. When you buy an existing business, you're not only buying equipment and supplies, but more importantly you're buying the name recognition, the quality and reputation that has been established, and buying a solid client base. Franchises have a much higher success rate than business started from scratch for this very reason. And believe me, it takes much longer than a "few weeks" to establish your own customers. This area takes much longer to establish and presents many obstacles along the way. Definitely do your homework, but if you can get the business at a fair price and he has established that kind of reputation that you feel comfortable with, then it may be a great buy. Just some thoughts to consider.

Matt Williams
Silver Lining Detail

 

[Secret Chimp]

Just my opinion but i would never buy an exsisting (sp?) business. The money that you would spend you could buy your own equipment and spend a few weeks getting your own customers. :cool

I already own a detailing business. And as such, I already have all the equipment I need. And you are greatly simplifying the process one goes through to get customers. People won't flock to you just because you have purchased $20k in stuff. And it takes way more than a 'few weeks' to get the right customers in a market that is saturated with mobile detailers.

 

[Secret Chimp]

Definitely do your homework, but if you can get the business at a fair price and he has established that kind of reputation that you feel comfortable with, then it may be a great buy. Just some thoughts to consider.

Matt Williams
Silver Lining Detail

Thanks for the input, Matt. The business I am looking at has been established for almost 20 years in this area and the owner is well respected. His business works by utilizing a 'pay ahead' payment model. So most of his clients are paid up for 6 months to a year. He wants a 1 years cash value for each client. But since he already has that for many of his customers, he is willing to sell his business for the difference between the amount a client has paid ahead and the value of one-years detailing services for that same client. So most of the cost to buy this business will be 'sweat equity' on my part. I'll be detailing a good number of clients for up to year, free of charge, before they have to re-up and pay for an additional years service.

Has anyone here ever bought out an existing detail service? Any insight into the true value of a mobile detailers client listing?

 

[Scooter]

So basically you are going to work for a year for no revenue. I understand that you already have a detailing business, so is that goin to finance your expenses? Is it going to be sufficient to pay for the extra chemicals that you are going to be using? IS the guy willing to sign a no compete contract for at least five years? It would really suck to go to the effort of detailing a customers car for a year, and then have him pop back in and take all the customers. Are you financially able to support yourself for the first year, and are you able to get the same or better results on details that the current owner is getting?

Just some questions to think about.


Scooter

 

[Secret Chimp]

So basically you are going to work for a year for no revenue. I understand that you already have a detailing business, so is that goin to finance your expenses? Is it going to be sufficient to pay for the extra chemicals that you are going to be using? IS the guy willing to sign a no compete contract for at least five years? It would really suck to go to the effort of detailing a customers car for a year, and then have him pop back in and take all the customers. Are you financially able to support yourself for the first year, and are you able to get the same or better results on details that the current owner is getting?

Just some questions to think about.


Scooter

Those are good questions that I have thought about myself also.

There are a number of clients who I would be detailing for a full year and getting no revenue. But there are just as many others that will need to re-up for the next year in 1, 3, and 6 months. So I will be generating a few dollars from these clients. I would want a specific listing of when the clients will need to re-up. That way I can calculate a cash flow prediction over the first 12 mos and see if it would be worth it to purchase at it's asking price.

The current owner is moving to another state and is changing careers. But I would like a nocompete document signed even though those docs are rarely worth the paper on which they are written.

Since I already support myself with a growing detailing business and because I am building an online site to sell cleaning prods to car guys in the area, I could weather the first 12 mos.

I currently can schedule 2-3 details per 10 hour day. But on average I do one per day with a few washes dispursed throughout the week. The business I will be buying, as a general rule, only books one detail per day. So I could fit his detail load into my current schedule. But I would possibly have to turn away cash paying business if I got much busier. He also does paintless dent and scratch/chip touch-up estimates for a few local companies. He has a deal where he gets 30-40% of the job. He will train me on how to perform these estimates and allow me to earn the revenue. This 'estimate' portion of his business is not being calculated into the final buy-out cost but it is worth a few hundred a week apparently.

I am not sure how to go about dealing with the clients who will no longer want service performed if the previous owner is no longer involved. Since these people paid a year ahead on their details, they may want their money back. And if/when they do, who would be paying for that? ME?! So those customers would cost me 2x. Or is there some way to make the previous owner responsible for refunds....