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  • What Should This Business Sell For......

    I'm thinking of buying a sewer and drain cleaning business that grosses $50.000 a year. Equipment is worn out/out dated and all needs to be replaced with new. Consists of 2 drum machines, 2 power hand augers and the basic hand tools that are needed. No vehicle.

  • #2
    Re: What Should This Business Sell For......

    $1.00 bob ?

    $50,000 a year is gross. You will need to retool the outfit. That can run $20,000.00 to over $ 60,000.00 and that’s not even including a veichial. You must think of insurance cost of doing business.

    Insurance, advertising and all tool repairs and general maintenance will be a big investment in itself.
    Sent From The StoolBus

    www.appletondrainandsewer.com

    Appleton WI, 54915
    1-920-284-7471

    Comment


    • #3
      Re: What Should This Business Sell For......

      Originally posted by AssTyme View Post
      I'm thinking of buying a sewer and drain cleaning business that grosses $50.000 a year. Equipment is worn out/out dated and all needs to be replaced with new. Consists of 2 drum machines, 2 power hand augers and the basic hand tools that are needed. No vehicle.

      To be honest, it is not worth anything. It sounds like the equipment is not worth much and the gross is so low the business name may have a stigma attached to it. Whatever they are asking for the business would be better spent on a fresh start.

      Mark
      "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

      I never lost a cent on the jobs I didn't get!

      Comment


      • #4
        Re: What Should This Business Sell For......

        In a service business like that the inventory/equipment and the companies reputation are the items of value. $50,000 gross doesn't leave much after you pay all of your expenses. The companies customer may be worth something if many of them are long term but if not then that also is subject to speculation.

        You might be farther ahead to just take the money you were thinking of using to buy this company and invest it into some new equipment and start your own company from scratch.
        Teach your kids about taxes..........eat 30 percent of their ice cream.

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        • #5
          Re: What Should This Business Sell For......

          This business has been around since 1970. I'll pretty much just be buying all of the accounts he has acquired over the years. So I guess my question is, what would this be worth ?


          It averages 15 calls per week. Yes, his prices are very low.
          Last edited by AssTyme; 04-13-2010, 01:32 PM.

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          • #6
            Re: What Should This Business Sell For......

            Originally posted by AssTyme View Post
            This business has been around since 1970. I'll pretty much just be buying all of the accounts he has acquired over the years. So I guess my question is, what would this be worth ?
            If you gave him $1,000 you would be over paying. The fact that all of his equipment is in disrepair is a good sign the business could not run on a gross of $50,000. Forty year old accounts that can't pay the bills are not worth much.

            Mark
            "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

            I never lost a cent on the jobs I didn't get!

            Comment


            • #7
              Re: What Should This Business Sell For......

              a lot is depending on (1) the size of the client list & (2) the amount of good will the company has

              answer those and i'll give you my interpretation

              when i opened my company i had the oportuninty to buy an existing business. the general bad will they had generated was enough to cause me to buy new and start from scratch. he's still trying to sell and does some business and still pisses people off on a regular basis

              steve
              In the never ending struggle to keep the water flowing.... The Poo Poo Cowboy rides again!!!

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              • #8
                Re: What Should This Business Sell For......

                Originally posted by ToUtahNow View Post
                If you gave him $1,000 you would be over paying. The fact that all of his equipment is in disrepair is a good sign the business could not run on a gross of $50,000. Forty year old accounts that can't pay the bills are not worth much.

                Mark

                I know him very well. He is very old school. Fixing what he has however he can and not wanting to buy new unless he absolutely has to. The business was supporting and I'm thinking will support one person fine.
                Last edited by AssTyme; 04-13-2010, 01:47 PM.

                Comment


                • #9
                  Re: What Should This Business Sell For......

                  Originally posted by stxrus View Post
                  a lot is depending on (1) the size of the client list & (2) the amount of good will the company has

                  answer those and i'll give you my interpretation

                  when i opened my company i had the oportuninty to buy an existing business. the general bad will they had generated was enough to cause me to buy new and start from scratch. he's still trying to sell and does some business and still pisses people off on a regular basis

                  steve

                  I've been working with him for 5 weeks now and most of his customers are repeat or referrals. I don't think he has many or any at all that dislike him. The business averages around 15 calls per week.

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                  • #10
                    Re: What Should This Business Sell For......

                    Originally posted by AssTyme View Post
                    I know him very well. He is very old school. Fixing what he has however he can and not wanting to buy new unless he absolutely has to. The business was supporting and I'm thinking will support one person fine.
                    A healthy business can sell for the value of assets and a good will amount equal to the gross annual sales of the business for the accounts. So if you feel it is a healthy business offer him $1,000 for the assets and $50,000 for the accounts.

                    Mark
                    "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                    I never lost a cent on the jobs I didn't get!

                    Comment


                    • #11
                      Re: What Should This Business Sell For......

                      what does he think it is worth?

                      Just a thought, make a deal that any calls that come in on his number, you will give him X% or flat rate finders fee, and then start passing out your card with your new number, and adds that have your new number, have one number that is his old number and your new number, that way his old customers that are repeat He is rewarded for and you can have a new number to build on, I do not know,
                      how bad do you need his old machinery to get started? I would not go over Ebay pricing on buying the equipment,
                      but just the sounds of it, I would not think it would be much more than worth a a few thousand at the most IMO.
                      Push sticks/blocks Save Fingers
                      ~~~~~~~~~~~~~~~~~~~
                      "The true measure of a man is how he treats someone who can do him absolutely no good."
                      attributed to Samuel Johnson
                      ~~~~~~~~~~~~~~~~~~~
                      PUBLIC NOTICE: Due to recent budget cuts, the rising cost of electricity, gas, and oil...plus the current state of the economy............the light at the end of the tunnel, has been turned off.

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                      • #12
                        Re: What Should This Business Sell For......

                        BHD not a bad idea.

                        I also would consider what Mark had to say he has been doing this a long time and knows his stuff. I have a saying "A fool learns from experience but a wise man learns from the experienced"

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                        • #13
                          Re: What Should This Business Sell For......

                          Why is he selling? How come he only profits 50K with all those
                          referrals? I personally think it's not worth it. For 50K
                          buy you own equipment and used van. If he plans on closing shop
                          you will get his customers anyway's.
                          Rod
                          MT. Washington Sewer & Drain Cleaning
                          Serving Berlin, NH and North Conway, NH areas
                          http://unclognh.com
                          http://mtwashingtonseweranddrainclea...m/default.aspx

                          Charging less does not mean more call volume it just means you have to work harder to reach your goals.

                          Comment


                          • #14
                            Re: What Should This Business Sell For......

                            For 15 calls a week, I would offer $5000 for the phone number, and that is it.

                            Be aware, lots of owners say they will retire and sell. Not many do it though. I knew a guy that sold his sewer company name every two years.

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                            • #15
                              Re: What Should This Business Sell For......

                              Originally posted by UnClogNH View Post
                              Why is he selling? How come he only profits 50K with all those
                              referrals? I personally think it's not worth it. For 50K
                              buy you own equipment and used van. If he plans on closing shop
                              you will get his customers anyway's.
                              That's not his profit that is his gross. Now figure the cost of doing business and the business is doing lucky to do much above the poverty level for a family of four.

                              Mark
                              "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                              I never lost a cent on the jobs I didn't get!

                              Comment

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