I suppose it depends on the location, type of business, condition of the books
and a host of other factors. You might want to contact a local business broker
and see what they say.
"Tell me what I should do, Annie."
"Stay. Here. Forever." - Life On Mars
The broker then will stand there with his hand out....even if you were not
selling the business nor wanting him to sell the business
I just thought that someone on the group would a the rule of thumb factor
going....like a certain times your gross pay or draw
No brokers yet....they become worse than car salesman or real estate sales
I've looked at this scenario more than once... any business owner who is
successful and large enough will.
There are 'old' rules-of-thumb.... which I won't mention because...
frankly.. they don't apply anymore.
Solid customer base, along with assets.... establish the value. As with
everything else anymore, "it's only worth what someone will pay!".
Talk to a broker that deals with your type of business. There are
national outfits that specialize in such things. The most cash comes
from big-boys wanting to move into new geographical areas or eliminate
I have a division of Emerson Electric barking at my door occasionally. A
broker contacted me about their interests. Eventually, if we continue to
do well... the price might get high enough. Right now it's not... but I
have a lot of dough in vehicles and equipment that are marketable
'elesewhere'... plus... it would have to be "fuck-you" money at this
point... an incredible premium.
Either I'll get it or retire a bitter, broke and tired old guy in 20
years with nothing but war stories (-;. That's the gamble you take...
and I'm taking it....
Speaking as one who sold their hvac business back in 99 to a large
company, I dont have any magic as to what you can ask for the
business. In the end, the purchaser is only going to pay what they
think it is worth.
I can tell you that what they are interested in is:
Customer base (made up of actual useable customers)
Your phone number
Your company name
Tools and trucks are considered minor unless you have a fleet of brand
You building is usually worthless to them.
Service Agreements - NONE...never believed in them for the 33 years I have
been in business. I do have a reasoning for this
Customer Base - 2800 customers on the books....most likely 65% repeat
customers. A few large Real Estates as customers...brings steady business
My Phone number - they can have it
Company name - They can have that....they won't keep it long
Tools & Trucks...have value anywhere
My building ....very profitable...it brings enough to offset just about
anything...10 units...4 commercial (I take up 2) and 6 nice apts located on
Too bad. Its not "what you believe in" its "what sells". Service
Agreement customers mean an almost 100% in the bank customer for the
term of the agreement to the new purchaser and CUSTOMERS are what the
new company wants.
A customer base is great but without anything to tie that customer to
the new owner, 50% (pulled that # outta my ass) of those "customer
base customers" may just leave.
BUT NOT what you think they are worth..........especially the tools.
Your building sounds like an awesome good thing but the purchasing
company may already have a business location. Nevertheless, it sounds
like you have a very nice piece of real estate someone will be
I see your point....(coming late now) since Homer chimed in.
The building (no doubt) I would want to sell separately at this point.But if
it goes at the sell of the business...so be it. But when one is buying a
business, they are basically buying a job. So how much do they want to spend
I have my eye on another business (with the wife's blessing) and it does not
require 24/7 attention.
Just getting tired of all the BS with the public and employees....NO WHAT I
Yes ... I am a top poster...I hate scrolling all they way to bottom...or
even yet...reading between the lines and paragraphs
The hard assets must be valued individually and is not a problem,
just time consuming, so start making a list.
The value of your business is determined after you let the buyer or
representative look at your books for the last few years. You can
usually figure the value as a multiple of 2 to 4 times gross NET
annual income. So if you have had a gross net of 80,000 before your
imaginitive tax calculations, then your business is worth about 160k
to 320k plus all the used assets value.
Intangibles such as good will are impossible to value which is why
the multiple of gross net is so attactive.
Your post is late and your calcs are way off? Have you actually sold a
hvac business before?
Here's a big big clue.
When you go to sell a hvac company there is not a list of 50 companies
beating a path to your door to hand you a million dollar check.
If you are lucky, you will find ONE company/person interested. I got
even luckier. I had two. One was very interested and was ready to hand
me that check almost immediately. Only problem was, it wasnt a million
or even close. The other co was interested but kept dragging their
feet. I wasnt interested in waiting a few months. It was gone in less
than a week.
Bottom line is, ........your company is worth what the buyer is
willing to pay.
Lots of them. 5 times net, # of agreements, assets, you also have to figure
if you are buying a wall 1-2 business that the customers are there for the
owner and you may lose a large portion of them from a management change
J- If you are a member of SRT ($50.00 a month is chickenfeed)
there are numerous industry wide 'coaches' , 'consultants', and
'advisors' as well as one heck of a lot of resi & commercial hvac
contractors to pose your question to. You never know, there may be a
SRT member shop local to you thats looking to expand...
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