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Old 06-20-2013, 03:46 PM
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RigglePLC RigglePLC is offline
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Join Date: Jul 2006
Location: Grand Rapids MI
Posts: 9,163
About 75 to 90 percent of gross sales is about right. Plus equipment and inventory value.
Value is a bit higher if the customers are bound by written contracts. Or if they are highly loyal.
When the economy was strong some were sold for 100 percent of annual gross sales.
The profits should pay for the business cost within about 5 years.
It must be less than it would cost a newcomer to start his own business in your area, and acquire the same number of customers using advertising and salesmen. The cost to acquire a new customer in your area is an important number.

And strong competition from other companies reduces the value and increases the risk to a buyer--lack of competition, or a dominant position in the market place increases the value of the company.

And of course, if other companies are anxious to buy your customer list--they might bid up the value of the company.
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