Posted on Jul 20, 2015
Have any of you had any experience selling a small service business?
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How did you determine the price and find a buyer.
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Owner
Posted >1 y ago
Responses: 3
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Finding the buyer is the hard part.
Generally (rule of thumb) the sell price is somewhere in the neighborhood of the value of the assets plus one year gross income.
Generally (rule of thumb) the sell price is somewhere in the neighborhood of the value of the assets plus one year gross income.
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SGT Richard H.
PO2 Peter Klein without knowing what your business is, one thing you may look into is selling to your competition....that may generate some bites, especially if you have employees they need and/or a client list they may want.
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PO2 Peter Klein
I have talked to a couple competitors. They are mulling it over. I will see one at wedding in a couple weeks. May be then.
BTW, I own a building permit processing service in San Diego. Low overhead. Good client list.
BTW, I own a building permit processing service in San Diego. Low overhead. Good client list.
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SGT John Turner
I have a consulting service fornoilnand gas well drilling and completions. The way my business is valued is by the MSA (Master Service Agreement) that I hols with various oil companies. I relay that info to illustrate that various companies are valued various ways. If the way you are marketing isn't working it may be the wrong valuation or marketing system. Keep trying someone wants to buy.
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I've bought a small tax practice a couple years ago. I know in the financial industry, you can get anywhere from 1 - 1.25 times gross revenue. Actual price will depend on, among other things, the structure of the buyout, the perceived value of clients (in my field, individual clients are far less valuable than businesses), the reason the seller is selling, length and distance of the non-compete agreement.
I bought my practice using a broker. If your a seller, you will increase the number of potential buyers if you are willing to consider self-financing or an earn-out arrangement.
I bought my practice using a broker. If your a seller, you will increase the number of potential buyers if you are willing to consider self-financing or an earn-out arrangement.
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Is your business a franchise? Many things to consider. If you are not having any bites you might consider a business broker. I have one I can connect you to. I am a franchise broker which is a little different. I find people every day that want to get into business, that is how my business works but if you are unable to get it in front of enough people then it will be hard to make the sale. For that reason I recomend a good broker.
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