I am currently going through a divorce and am trying to come up with a true value of my business if I was to sell a it. The business evaluation care back at $143k which I believe is incredibly high. My gross is $300k and my take home is around $90k. I have a mix of commercial and residential window cleaning. I have three vans and four employees. What would you say the value of the business would be that someone would actually pay for it? Thank you in advance
I’m sorry to hear that you have an impending divorce.
There are many variables in the sale of the business.
Client list-if you’ve got info on the last time you cleaned the home, cost and frequency it helps with pricing. IF you’ve got folks on the list over X number of years since the cleaning it will not be as valuable.
Clients you have contracts with-commercial usually, and the time frame of the contract (usually since annually for a given frequency)
Software for tracking clients, appointments, invoices, etc.
Previous tax info/llc etc.
As the owner, the value you put on the business is likely higher because you have put untold hrs and energy and tears and hope into this thing that can not be fairly evaluated on principle. The value to an outside purchaser will be lower as they are looking at what needs to be changed-even if it is a great well oiled machine, someone will find something to devalue it; the very least they may view your circumstances of sale and use that to decrease the value.
The market for non-contract service work, from my research (after I bought a WC “company” that ended up being me buying my job ) is roughly 30-50% the average of the previous 3 years gross + the REAL value of equipment + other hardware and software. This goes up if you can prove a significant year over year increase and may lead to 100%. But, that would be some serious improvements and may very well be the case for newer businesses. I wish you the best of luck and pray for you and yours.
I think $143k is fair and a great place to start from, working down for you and up for them in 5-10% increments.
I guess my question is not so much about the valuation, but the real world value. Does anyone know anyone who has sold a window cleaning for this much money? I can’t see anyone forming over $150k for my business. It has a value to me but I don’t know it could fetch that kind of money
That is when you SALE your business and the systems you have in place. As @mshramek said the franchises sale for that often because they have “SYSTEMS” and if you can show you have systems and a current clientele that is making the money they hope to make in 2-5 yrs but do it now-you will sale.