Valuiation of a window cleaning business

Introductions
1

I am new to the forum here at WCRA and I am interested in selling my business. In doing this I am trying to figure out the right asking price. I am curious how others discern the value of their business? I have looked at several ways. One method is using assets plus cash flow. Or taking cash flows over a period and averaging them. Or also using total revenue. I am interested to hear others thoughts.

Thanks

Nels

2

missing some vital information here:

  • is your work mostly residential, commercial, storefront, a mix of all three…?
  • what is your business structure (ie. sole proprietor, s-corp, llc)
  • do you have employees?
  • do you perform most of the labor yourself?
  • do you have existing contracts with any clients?
3

We sold ours for 4 months average revenue (100% residential) plus equipment and vehicles. Included were customer lists, marketing materials, website,etc. We probably could have gotten a bit more, but we were much more comfortable with the person we sold to vs other offers we received. I wanted to make sure the buyer could immediately handle the workload, as well as meet my quality standards.

Sent from my iPhone using Window Cleaning Resource

4

You really have a blank slate. Service businesses are usually worth what someone is willing to pay for them.

In certain situations, depending on the buyer and the seller, the real formal evaluation can mean very little. Most times this is the case because businesses in our industry do not operate off of the value of contracts, but more off of the value of good will.

That said, contracts and physical assets will get you the most “bang for your buck” as a seller, as well as bring more qualified buyers. Customer lists , websites, and phone numbers are great, but in all reality don’t have much real value. well websites might be a different story, but thats a different conversation.

To answer your initial question, this article can explain way better then i could,

How to Value a Business?

Good thread, ill definitely be following this

5

bottom line from many threads, resources and outside anectdotes: 30% of annual revenues

some get more, depends on how up to snuff the budget is (see: Seeing beyond the numbers by Greg Crabtree)

and how turnkey it is, esp with an ops/general manager in place

6

Thank you for your input. I have recently looked at a cash flow model and growth projections as a good way to value it. This would be similar to how other companies would be valued in the open market. The business essentially runs itself due to good ops and structure. The relationships are solid and I could continue to manage it and treat it like an annuity. At the same time I would like to see what it might be worth on the open market.

7

You might find this article helpful too:
4 Steps to Sell Your Service Business for the Highest Price | KevinDubrosky.com

8

great article Kevin