Business value

[DangerousBrian]

Hi,

I’m looking to get an understanding of the value of my dads business who’s looking at retiring after around 30yrs building it.

It’s all commercial cleaning, bulk on 12 month purchase orders and guaranteed number of cleans/turnover per year, bulk of it exterior windows, cladding and then some internal, all around the Warrington/st Helen’s area and with all together or close by work.

Turnover around 120k per year employing 2 full-time staff, net profits of around 50k per year for the owner who only does a bit of invoicing/emails due to age.

Is it worth trying to sell as a whole business? Split into smaller portions? With equipment? Without?

Plenty questions

Thanks,

 

[Part Timer]

Not possible to advise as there are numerous questions that need to be asked and answered. All I will say is it must be a traditional round as you wouldn't make 40%+ profits on a WFP round.
@Cghwindowcleaning would be able to advise better.

 

[Cghwindowcleaning]

It’s hard to value it.Normally it’s x amount of annual profit
The problem you will have is finding a buyer willing to pay what you want.

Let’s say it goes for 1years profit + Vat it will be around 60k.No sole trader is going to have that lying around and the repayments on a loan with interest rates at the minute it wouldn’t be viable.

For me if I was making a grand a week for very little admin work I would be using it as my pension Pot and keeping it.

other than that if you really want/have to sell then the best bet is to offer it up to the big cleaning firms in and around your area.Some one who is already established with a multi van/staff business where the purchase could fit in with what they already have.

 

[Pjj]

Like all things it’s only worth what someone is prepared to pay , might be worth 120 k but would anyone pay that ? Maybe they would maybe they won’t . Ime in the process of selling loads of work and thats going at 4 times the month price , I feel as it’s well established and very compact it’s worth more than that , but ime happy with the price as a bird in the hand is worth two in the bush . I think the op would be wise to consult a professional business seller or what ever they are called to get advice rather than a bunch of window cleaners as he could be making a huge financial mistake. To be fair ime surprised a business in that are is turning over that amount as most claim it’s not posting earn those figures in that area .

 

[DangerousBrian]

It’s hard to value it.Normally it’s x amount of annual profit
The problem you will have is finding a buyer willing to pay what you want.

Let’s say it goes for 1years profit + Vat it will be around 60k.No sole trader is going to have that lying around and the repayments on a loan with interest rates at the minute it wouldn’t be viable.

For me if I was making a grand a week for very little admin work I would be using it as my pension Pot and keeping it.

other than that if you really want/have to sell then the best bet is to offer it up to the big cleaning firms in and around your area.Some one who is already established with a multi van/staff business where the purchase could fit in with what they already have.

Thanks for the input.

I think it’s just an age thing and wanting to call it a day after all the years, even with the small amount of admin it’s still something that ties him from being able to go away for a few months and just forget about it completely.

 

[DangerousBrian]

Like all things it’s only worth what someone is prepared to pay , might be worth 120 k but would anyone pay that ? Maybe they would maybe they won’t . Ime in the process of selling loads of work and thats going at 4 times the month price , I feel as it’s well established and very compact it’s worth more than that , but ime happy with the price as a bird in the hand is worth two in the bush . I think the op would be wise to consult a professional business seller or what ever they are called to get advice rather than a bunch of window cleaners as he could be making a huge financial mistake. To be fair ime surprised a business in that are is turning over that amount as most claim it’s not posting earn those figures in that area .

Thanks, I think it’s looking better to split into smaller pieces of work tbh.

On the turnover in the area, it’s just a business that’s been built over 30 or so yrs and it’s purely offices and no domestic work, so a single customer can add 20k turnover easily.

 

[Ws81]

Hi,

I’m looking to get an understanding of the value of my dads business who’s looking at retiring after around 30yrs building it.

It’s all commercial cleaning, bulk on 12 month purchase orders and guaranteed number of cleans/turnover per year, bulk of it exterior windows, cladding and then some internal, all around the Warrington/st Helen’s area and with all together or close by work.

Turnover around 120k per year employing 2 full-time staff, net profits of around 50k per year for the owner who only does a bit of invoicing/emails due to age.

Is it worth trying to sell as a whole business? Split into smaller portions? With equipment? Without?

Plenty questions

Thanks,

 

[Ws81]

Hi,

I’m looking to get an understanding of the value of my dads business who’s looking at retiring after around 30yrs building it.

It’s all commercial cleaning, bulk on 12 month purchase orders and guaranteed number of cleans/turnover per year, bulk of it exterior windows, cladding and then some internal, all around the Warrington/st Helen’s area and with all together or close by work.

Turnover around 120k per year employing 2 full-time staff, net profits of around 50k per year for the owner who only does a bit of invoicing/emails due to age.

Is it worth trying to sell as a whole business? Split into smaller portions? With equipment? Without?

Plenty questions

Thanks,

 

[Ws81]

Hi

Can I ask please how much you would be looking for?

Thanks

 

[Deleted member 5762]

Hi,

I’m looking to get an understanding of the value of my dads business who’s looking at retiring after around 30yrs building it.

It’s all commercial cleaning, bulk on 12 month purchase orders and guaranteed number of cleans/turnover per year, bulk of it exterior windows, cladding and then some internal, all around the Warrington/st Helen’s area and with all together or close by work.

Turnover around 120k per year employing 2 full-time staff, net profits of around 50k per year for the owner who only does a bit of invoicing/emails due to age.

Is it worth trying to sell as a whole business? Split into smaller portions? With equipment? Without?

Plenty questions

Thanks,

I've no idea on how to value commercial work and it must be tricky to value other work as it's goodwill really - your Dad has built it up from his own hard slog so obviously it would be best going to someone who will keep it going that way. Best wishes and hope your Dad gets a fair price ?

 

[AEC]

Not possible to advise as there are numerous questions that need to be asked and answered. All I will say is it must be a traditional round as you wouldn't make 40%+ profits on a WFP round.
@Cghwindowcleaning would be able to advise better.

40 to 60% a easily achievable margin with either method

 

[AEC]

I've no idea on how to value commercial work and it must be tricky to value other work as it's goodwill really - your Dad has built it up from his own hard slog so obviously it would be best going to someone who will keep it going that way. Best wishes and hope your Dad gets a fair price ?

A round is said to be worth 3 to 10 x monthly turn over. For 50k net profit 150k to 300k is a fair guide.

 

[Part Timer]

40 to 60% a easily achievable margin with either method

Well why not buy it instead of quoting numbers?

 

[AEC]

Well why not buy it instead of quoting numbers?

If i wanted to buy it I would ?? What was stated was a guide to help a seller si why get so rude ?

 

[Part Timer]

If i wanted to buy it I would ?? What was stated was a guide to help a seller si why get so rude ?

I questioned his percentage profit margin, if it was a WFP round, as I can't see anyone making a £50k profit, on a £120k turnover, with 2 full time staff working the round. You contradicted me with no further input, and I'm rude?? I also doubt, very much, you would get anywhere near 10x on a commercial cleaning company that has to renegotiate their annual contracts.

 

[spruce]

Whoever buys it is buying goodwill. Goodwill isn't tangible. It isn't even tax deductable.

When I worked for Reg Vardy, Peter Vardy the owner would only value the business' assets (land, buildings, garage equipment, etc) if he was buying an existing dealership. He would never consider buying their customer base as it meant nothing. He wouldn't even buy their stock of spare parts in the parts dept. He also wouldn't take on employing their staff either. They would have to apply for job vacancies. Peter had a team of existing employees he would put into the dealership to get it up and running.

I appreciate that the motor trade isn't the same as window cleaning, but as @Part Timer says, if everyone cancelled their annual contract, the new owner would have nothing. The risk is too great.

We purchased a small traditional window cleaning round many years ago. We immediately converted it to wfp as the houses were mainly dormers and I wasn't going to climb on roofs as the previous window cleaners did. Wfp was new in those days. These customers for the most part had never heard of it before. I very quickly realised that we could have lost everything if those new customers didn't accept their windows being cleaned using a different method.

This is just my opinion.

 

[Windowscottynwa]

Hi,

I’m looking to get an understanding of the value of my dads business who’s looking at retiring after around 30yrs building it.

It’s all commercial cleaning, bulk on 12 month purchase orders and guaranteed number of cleans/turnover per year, bulk of it exterior windows, cladding and then some internal, all around the Warrington/st Helen’s area and with all together or close by work.

Turnover around 120k per year employing 2 full-time staff, net profits of around 50k per year for the owner who only does a bit of invoicing/emails due to age.

Is it worth trying to sell as a whole business? Split into smaller portions? With equipment? Without?

Plenty questions

Thanks,

Why don’t you take it on ?

 

[AEC]

Not possible to advise as there are numerous questions that need to be asked and answered. All I will say is it must be a traditional round as you wouldn't mke 40%+ profits on a WFP round.
@Cghwindowcleaning would be able to advise better.

In reply

I questioned his percentage profit margin, if it was a WFP round, as I can't see anyone making a £50k profit, on a £120k turnover, with 2 full time staff working the round. You contradicted me with no further input, and I'm rude?? I also doubt, very much, you would get anywhere near 10x on a commercial cleaning company that has to renegotiate their annual contracts.

Ok some facts . £40.00 an hour plus as achievable if your a grafter , (The last national window cleaning figures I came across were £1.40 per window) and I have used £1.10 per window.
Window cleaning is a minimum wage job at say £15.00 employed (true cost) £18.00 self employed, Runnig costs £100 per week. 7 working hour day £280 so £1,400 a week Total cost employed £700.00 plus running cost leaving a profit of £700.00 . Now we have a profit of 50%, Staffed up so little fall out. To build up a round like this would take 5 to 10 years in most areas but we will use 5 years.
Year 1 £100 a week year 2 £200 3 £400 Year 4 600.00 Year 5 £800.00 In year one alone you are £65,000 down surly the round is cheap at £100,00.00 as an example. What counts is what you make and building a good solid well paying round takes many years and staffed work will have little fall out if you keep things the same. Second morgage your house and pay 15 k back a year over 10 years , If your smart use your year 1 profits to pay half off.

 

[adamangler]

Pay someone to do the admin and run the business, thats only a part time postion and take an owneres salary.

Problem with rounds is that everyone wants to sell at 10 cleans but only want to buy at 3 or 4 max. Ive sold a few times its barely worth it.

 

[Part Timer]

In reply

Ok some facts . £40.00 an hour plus as achievable if your a grafter , (The last national window cleaning figures I came across were £1.40 per window) and I have used £1.10 per window.
Window cleaning is a minimum wage job at say £15.00 employed (true cost) £18.00 self employed, Runnig costs £100 per week. 7 working hour day £280 so £1,400 a week Total cost employed £700.00 plus running cost leaving a profit of £700.00 . Now we have a profit of 50%, Staffed up so little fall out. To build up a round like this would take 5 to 10 years in most areas but we will use 5 years.
Year 1 £100 a week year 2 £200 3 £400 Year 4 600.00 Year 5 £800.00 In year one alone you are £65,000 down surly the round is cheap at £100,00.00 as an example. What counts is what you make and building a good solid well paying round takes many years and staffed work will have little fall out if you keep things the same. Second morgage your house and pay 15 k back a year over 10 years , If your smart use your year 1 profits to pay half off.

If only business was this easy we'd all be millionaires

 

[AEC]

If only business was this easy we'd all be millionaires

No one said business was easy but these figures are reality and achievable.