There is difference between a person selling his business for 500 and offering him a ridiculous low ball number.
You are right that it is his choice but its also a choice not to insult someone by an unreasonable offer.
[MENTION=6764]riverview[/MENTION], how many unique customers are on the list? What % have been serviced more than once?
Hey diamond
Been partying till 3 am with your baby? Lol.
I still recall those loooong baby nights.
Have fun!!!
Pax
Lol, I guess that was her Father’s Day gift to me. Comes with the territory though. I’m just glad I don’t have to get up at 6 am anymore.
according to the Simple Numbers book, it would be based on a factor of the pre tax net profit
what’s great about about using that measuring stick is it’s like a laser beam that will cut thru all the garbage and expose profitable pricing and fair market wage for all responsibilities or lack thereof. Just as well as Superman’s xray vision
one can also back it in, in their own biz and see what it has cost per client and per repeat client and get an idea of what it would cost to create their own customer list if that is all that is really being sold
if one is at $100 per client aquisition cost, 200 clients would take $20,000 to create with their past proven marketing strategy
then it gets into who is a repeat or not
no contracts, so that takes the future dependability down
Like Jared said, one can create a framework of negotiation and terms to at least guarantee some type of set amount ROI
Brooklyn, right in front of the Brooklyn Bridge. Lived there for 8 years previously and wife’s family is there. Where exactly are you guys?
[QUOTE=diamondridge;247739][MENTION=6764]riverview[/MENTION], how many unique customers are on the list? What % have been serviced more than once?[/QUO
I started the business last year. About 75% I’ve done multiple times last year, or done this year for the second time. Because of circumstances, I only put out about 100 fliers this year. But I booked through June by mid May. I have some clients that refer me a lot, and a few clients who have enormous homes and want their windows done every few months. So I have received quite a few new clients this year. All in all, probably 50% of my work this year has been repeat work. Sorry for the very meandering reply:D
[quote="“riverview,post:27,topic:25060”]
So how many total in your database?
I know we won’t regret it. And greed definitely needs to be out of the equation. Thanks!
check that, 53 clients in database
[quote="“diamondridge,post:28,topic:25060”]
53 clients in database
[MENTION=6764]riverview[/MENTION]
Oh cool we are about an hour from there, over the bridge in NJ.
I can’t imagine it to be worth a lot. Customer list is a great start, but website can be set up relatively cheap these days. Also, it depends if it has any potential clients visiting it.
The one aspect of business value IS donr hear talked about much when it comes to determining the value of a business is its systems. The systems in place in a business along witb its brand are what makes a busines truly unique and profitable. Without these its just equipment and a past customer list, which may have some value but never the full value that is spoken of when experts give formulas for determining value.
A unique brand makes your business diferent from somone who just has a truck and flyers which anyone could create on there own. Your brand makes it dificult for others to copy what you do and gives your business value. Think about Coke vs Pepsi, which one do you think is worth more and why?
Developed systems in your business makes the brand easily repeatable by the staff of the comoany, or in this Case the new owner. This also gives the business value. Brand and good working systems that easily reproduce your product and brand are what gives your business a lot of its value as they make it something that someone can’t easily duplicate on their own.
That said it sounds like you have a customer list for sale and that’s about it. It stilk has value but not near the value it would have if you have a creative brand and proven systems to easily reacreate your results. If you have those things then to me at the small size of your customer list those two things are worth more than the list itself. With the brand and systems the customer list is easily reproduced. The list without the brand and systems gives no garuantee that the previous success is repeatable especially with a new owner.
My advice is, if you trust your friend and he is proven to be a hard worker, go with a small down payment up front and a percentage of profits payed out over the first year. This insures you get some money for it up front so if previous success does not repeat itself you still got something for it. But it also insures him an opportunity to make something with it without the risk of paying a large some up front for something that has no system in place to insure past success to equal future success. It also gives both of you the potential to make some good money on the deal if you both continue to committed for the year. Your Support over the phone would help insure customer retention and guide him through his first year. Just my take.
This sounds very interesting but what systems are you talking about and how do you put a value on it. Everyone talks about a unique system that sets their business apart from others but when you really look at it, what really sets the business apart from others? We all clean glass, screens, tracks, gutters or what ever. What system can I have in my business that you or someone else doesn’t have that can really have value. I’m not knocking what you are saying, just making a counterpoint for discussion sake. Can you give examples.
Yes. Great question. To name a few: mareketing system, sales system,customer referel system, customer rescheduling system, customer comunication system, human resource system, emplouee training system just to name a few.
Everyone can, but do not, have sysyems in place. Also just because you have a system for doing something in your business does not mean it is a very efficient system. Systems in your business can improve with continued development over time to become highly effecient. When your business runs more efficiently your response rate gets quicker and more consistant along with reducing the cost of doing business as time eventually teanslates into money.
Highly efficient systems make a business extremely competative. Business systems also insure cosistant results to the customer which is one of the main things customers want, cosistancy. How many times do you go to a resteraunt and some times you have a good experience and other times its bad? The problem is issauly tied back to the management and lack of systems in place to insure consistant quality.
Lroven systems make previous successes easily repeatable. Take a marketing system for example. If you have firgured out a proven way to market where you can produce similar qualjty results every time it allows you to have control over the growth of your business. It takes a lot of Trial and error or.hiring experts to adjust the veriables in your marketting system to come up with a highly effective and cosistant system. Things like what type of marketting vegicle, identifying the right target market, the timing, the design of the marketting piece, the offer etc. When you tweak and fine tune all the variables until you are able to get consistantly successful results that are repeatable you have a proven marketting system for your business. That is valuable. If your comoetition does not have this then they are not in control of when the phone rings. Since you can make the phone ring with a proven markwtting system you have a distict atvantage over your competition.
Or take a good human resource systemfor example. A good HR system would consist of things like where to consistantly, recruit good emoloyees from, a competative pay scale and compensation program, employee retention, a good promotion system, employee to employer comunication system, employee to employee comunication system, disciplinary system, lay off and rehiring system etc. A good HR system along with a good employee training system means you can quickely Grow and downsize to adjust to flucuations in the market whaich puts you at an atvantage over your competition. A good HR system can allow you to lower your pay scale because you are more efficient at hiring a.d training emoloyees. This means new qualified employees are easier to.come by.
These are just a few examples of how great sytems can seperate one company from another in the same idustry and add a great deal of value to a company.
This iswhat makes a frachise worth paying the fees. if it is a good franchise they will have already developed and proven sytems that you can implimnt right away to see rapid results. They also continue to.improve there systems and develop new ones.
McDonalds is another great example. They havegreat systems for everyrhing that insures every resteraunt is run.the same way to producethe same quality results to every customer. You generaly.get.the.same results no matter what Mcdonalds you go to. Sure there may be some differences but if you consider how many rwsteraunts they have there consistancy is awesome. you could not just start your own burger resteraunt and.get the same results. Why? Because you dont have access to.the same proven systems to develope and manage a burger resteraunt.
products are so much easier online or off, or a controlled enviroment where people come to your brick and mortar place
but with any service business, regardless of systems, there is so much on the fly stuff that relies on the individual in the field, and a unique combination of tech skill, experience, relationship skills and other skills that systems or perhaps even education cant solve
Banks have proven they cant “teach” customer service, it’s inate, a psychograph they are looking for in an individual rather than just a ‘skill’ or ‘common sense’ to be taught
of course there are ‘result systems’ that can be checked off, but there may be a lot of disgruntled customers along the way that will never use you again
all the window cleaning franchises resort to lowest price, my opinion is its because they cant guarantee anything about the field employees that is spectacular, since most will be paid as low as possible and just need a clean record and drug free
in a service biz I think if a franchise had some stellar education and training and a way to get people up to speed and at senior levels of skill far quicker and a way to increase employee retention, that would make a diff, otherwise its all lowest price
think of in n out burger in so cal, that is the place a mcd employee really wants to work, higher pay at every level, a ‘more respectable and cool’ place to work at and some great employee retention
i digress, that’s back to product
in a service biz it’s always going to bottleneck at the people
Bruce, you hit the nail on the head. That was my point exactly. you need systems that can produce those results for you. When I speak of systems we generally think of systems as they directly relate to the sale and production of our services. The problem is we often neglect to see the need for great systems in the areas of our business that affect the success of those direct systems.
Great HR and employee retention systems affect our cost of goods sold. A poor HR can raise our expenses and increase our price or a bad training system can affect the quality of our product. Or how about bad employee attitude because we have bad communication systems so you have disgruntled employees who don’t feel like anyone is listening to their complaints.
The key is great systems. They are so important to the success of your company that they have great monetary value. Most companies don’t have great systems. The systems are great because they are difficult to produce and that’s what makes them so valuable. Don’t fall into the trap of thinking that because most companies don’t have great systems they don’t exist and they are not the answer, but rather realize that if you could produce great systems that would give you consistent results in your company across the board, then your company will stand out from most companies out their and be highly sought after.
Systems that produce consistently great results makes a company highly valuable more then anything else, no ,matter what type of business.
Without any equipment, van/truck, contracts, marketing material, etc. it appears you’re just interested in selling a website and a list of client’s names (assuming this info is recorded). Since you’re only in your 2nd year (part-time) I can’t imagine that list is much more than 100 homes. Anyone could have a website built for less than $1,000 (I paid $750 because I’m not very techie). Also, I’m not sure how often you serviced these clients but based on the amount of time I’m assuming…once maybe twice? I’m not sure how much loyalty these client’s would have to your company’s name if you were to sell it to someone else. Unfortunately, I can’t give you a $ amount, but I’m guessing there’s not much value here. If you’re not interested in window cleaning anymore I would suggest selling your equipment as well. Hope this helps and good luck!
Scott
