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View Full Version : What is the general way to figure $ for selling a business?


fiveoboy01
06-13-2007, 08:27 PM
Just curious.

Someone approached me and stated their business was for sale.

The sale figure given was approximately 2.5-3 times one year's gross income.

Does this sound right? Seems like a lot to me but I'm not sure.

abuckeye
06-13-2007, 08:38 PM
Everyone has their price. That sounds way too high for just accounts. I once bought a company; the equipment and then the accounts. You can do a search and find lots of opinions, I have read where 20-30 percent is the going rate, but who really knows. I have also seen where you pay a flat rate per account, say $50 or so per account.
I personally don't like buying accounts because you usually lose at least 50% of them. Just my .02

fiveoboy01
06-13-2007, 08:49 PM
Well that's what I was thinking, there's no guarantee that you're going to keep the accounts.

This does include all the equipment, a truck and trailer. The equipment and trailer are pretty decent but the truck is pretty old, think mid-80s.

I'm not buying it, but my conversation today just had me thinking about it.

The mayor
06-13-2007, 09:03 PM
I bought some one out last year. They wanted one month of wages and had to buy all of the equipment. They had no contracts with anyone residental and one year with commercial. Some nice residentals and commercial. I gave him what he wanted and paid him in the fall. We talked with all of the customers. When I started in the spring I retained ALL accounts and was given the go ahead on the commercial. The guy I bought the business from was real professional ,still till this day calls me to make sure all is going well. I went from 1 employee to 4 full time and one part time. What a shock...but wouldn't pass it up for anything. I really lucked. All are happy. The seller the customers and me. Good luck on what you decide to do.

rodfather
06-13-2007, 09:06 PM
There is no "general" way, believe me.