i am thinking about buying an existing business, it has one trailer with two hot water washers with one pumping out 5.5gpm and one with 7gpm and a 500 gallon tank and accessories. then he has an 89 international with two 5gpm hot water washers, two 500 gallon tanks and accessories. there are 10 dealerships and 45- 50 venthood acounts that come with it. what do you think it is worth?
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how can you tell what an existing business is worth
- Thread starter swood0024
- Start date
Clean County
New Member
There is no way to even guess what that business is worth without knowing some more info like how much do those accounts pay? How often are they serviced? Are they contracted accounts etc. etc. etc.
How much are they asking for the business??
How much are they asking for the business??
appearance
Member
swood0024 said:
the hoods look like you could make good money, i wish i had that many. as for the dealerships i was always told to stay away from them unless there paying good.
you still never said how much he was selling the buissness for, that makes a big difference too.
CaroliProWash
New Member
Is he guaranteeing these existing contracts because you're paying the bulk of that for future income, not equipment? What happens if those customers don't want to automatically switch to a new person or if they want to renegotiate the terms & price? Will he sign a non-compete? It would really be a pisser if he sold you this biz and then took a fraction of it and started over again - his old customers would probably go back with him in a second because they're comfortable with him.
Celeste
Oh - and you'd definitely need to look at at least the last three years returns and books.
Celeste
Oh - and you'd definitely need to look at at least the last three years returns and books.
yes he will sign a no compete contract and i will make it for all of texas, the vent hoods are under contracts but the dealerships are not he has one employee that has been with him for 2 years and i will keep him on to have a face that the people have been seeing for the past two years. DOES ANYONE KNOW OF A BANK THAT WILL LOAN UP TO $150,000 BANK OF AMERICA LOOKE AT ME AND SAID SORRY CAN'T HELP. it almost makes me want to change all my accounts to another bank. please help tired of working midnights and weekends!!!!!!!!
CaroliProWash
New Member
Umm, hate to tell you this but hoods and car lots are nights and weekends!
Specifically why wouldn't your bank do the loan? You or the business? If that's too personal, disregard the question
but maybe they saw something in his bookwork that didn't look worth the risk to them - also, were you asking for the whole 9 yards? That's not going to happen - why would they want all that risk for about 20K in equipment as collateral?
Celeste
Specifically why wouldn't your bank do the loan? You or the business? If that's too personal, disregard the question
but maybe they saw something in his bookwork that didn't look worth the risk to them - also, were you asking for the whole 9 yards? That's not going to happen - why would they want all that risk for about 20K in equipment as collateral?Celeste
i was in the office for a total of five min they didn't even look at the paper work i brought. they said we don't do loans that big. that 100,000 is the biggest and it would take a yr to get. there is a guy that does the dealerships and i would only have to work some night on the hoods until i got someone else trained.
Tim Mcculla
New Member
The price of a business is the highest amount that someone is willing to pay. In this case: you, 150 K.
I pesonally think it is a little high for what you discribed, but I'm not seeing the whole picture.
The only way I would ever buy a service business like this would be:
1) pay for assets up front. go though his entire inventory and establish a fair price for everything.
2)??? pay a little good will/ good faith (this may already be partly in the inventory you purchase - you may be buying some obsolete equipment that you may never use?).
3) negotiate a 10 to 20% commision to old owner for sales to his EXISTING CLIENT BASE and/or SALES HE GENERATES. for a period of two to three years. For example, 20% for two years or 15% for three.
Hope this helps, Tim McCulla
I pesonally think it is a little high for what you discribed, but I'm not seeing the whole picture.
The only way I would ever buy a service business like this would be:
1) pay for assets up front. go though his entire inventory and establish a fair price for everything.
2)??? pay a little good will/ good faith (this may already be partly in the inventory you purchase - you may be buying some obsolete equipment that you may never use?).
3) negotiate a 10 to 20% commision to old owner for sales to his EXISTING CLIENT BASE and/or SALES HE GENERATES. for a period of two to three years. For example, 20% for two years or 15% for three.
Hope this helps, Tim McCulla
Douglas Hicks
New Member
GEt a breakdown of the length of time he has been servicing the accounts. is there a history of service intervals or are these new accounts? Talk to your accountant first. Get a non-comptete, written by an attorny.
You should be able to pay for a service business in 18 months from the profits of the business. will this generate $ 8,333 per month?
You might offer a percentage for each service. That would protect you from clients jumping ship.
If you buy, have him write a letter introducing you to his clients, and have him take you to meet the clients.
You should be able to pay for a service business in 18 months from the profits of the business. will this generate $ 8,333 per month?
You might offer a percentage for each service. That would protect you from clients jumping ship.
If you buy, have him write a letter introducing you to his clients, and have him take you to meet the clients.
225 per hood?
Is 225 per hood really ok? I've been trying to understand what the going rates are and I had the impression that $450 was sort of the baseline for experienced legitimate insured etc., with $250 being the lowball, that often doesn't include actually cleaning the whole system up through the roof and fan.
I'm ready to work for whatever the going rate really is but I'm trying hard to understand where my bottom line needs to be so that I don't accidentally lowball and drag others down in the process. Even my accountant said "don't try to win business on price, you'l just end up working with cheap people and maybe force others around you to earn less too. Instead, win the business on quality and consistency and get paid well".
swood0024 said:
Is 225 per hood really ok? I've been trying to understand what the going rates are and I had the impression that $450 was sort of the baseline for experienced legitimate insured etc., with $250 being the lowball, that often doesn't include actually cleaning the whole system up through the roof and fan.
I'm ready to work for whatever the going rate really is but I'm trying hard to understand where my bottom line needs to be so that I don't accidentally lowball and drag others down in the process. Even my accountant said "don't try to win business on price, you'l just end up working with cheap people and maybe force others around you to earn less too. Instead, win the business on quality and consistency and get paid well".
appearance
Member
225$ a hood maybe a small one!!! my going rate depending on size and how dirty ranges from 250 small hood up to 600$ for very large hoods or if there are more then 2 hoods.
Yes It Is 225 For The Small Ones On Up. I Was Told, I Havent Gone And Looked At The Books Yet That It Generates About 12,000 A Month/ Or 144,000/yr. It Is Hard Finding A Bank To Loan Me The Money Any Suggestions On How I Could Possibly Make A Deal With Him (so Much Per Month, Or A Percentage Of The Services). Any Ideas Would Be Great I Really Want To Do This, But Can't Find Any Help!!! [1010101]
north coast
New Member
https://www.53.com/wps/portal/calsma08
I hope this link works and helps, but it is a calculator that can help you put a dollar amount on a company's net worth.
I hope this link works and helps, but it is a calculator that can help you put a dollar amount on a company's net worth.