Jump to content

Price of buying a round


Richard Rose

Recommended Posts

Richard Rose

I’ve been given the chance to buy a well established window cleaning round. 900 customers generating a turnover of £9500 a month. What’s people’s thoughts on a sensible price to pay.? It’s a good compact round using mostly WFP but a little trad

  • Like 1
Link to post
Posted (edited)

Usually 3x monthly turnover. Good turnover, too big to do it yourself. For me more important than turnover is achievable price per hour. If it's too low, you will not be able to pay employee to do it and still make proffit after all other costs of runing business.

Edited by moto
Link to post

Thats working out at a smidge over £10 a house, which isnt much for Norwich. Might have a lot of work ahead! Have you been able to sample the work at all?

Link to post
Richard Rose
14 minutes ago, Robt100 said:

Thats working out at a smidge over £10 a house, which isnt much for Norwich. Might have a lot of work ahead! Have you been able to sample the work at all?

No I haven’t yet. Hoping to get out next week. I know what your saying about price but need to see the work to gauge it.  Was just trying to get some thoughts on a rough price to help with my negotiations. 

Link to post
Richard Rose
25 minutes ago, moto said:

Usually 3x monthly turnover. Good turnover, too big to do it yourself. For me more important than turnover is achievable price per hour. If it's too low, you will not be able to pay employee to do it and still make proffit after all other costs of runing business.

Thanks. Yeah it’s normally done with 2 lads while the current owner runs his builders clean business. It needs some looking into. Was just trying to get thoughts on a purchase price. Thanks for your reply 

Link to post

Most seam to advertise  work between 3-10 times the job price most seam to pay 3-4 times the price , but have a good look at the work before parting with any money and see how compact it is and size of properties . Try and work some of it with him then start negotiations if interested start low you can always make a higher offer .

Link to post
Richard Rose
2 minutes ago, Pjj said:

Most seam to advertise  work between 3-10 times the job price most seam to pay 3-4 times the price , but have a good look at the work before parting with any money and see how compact it is and size of properties . Try and work some of it with him then start negotiations if interested start low you can always make a higher offer .

Thanks for your reply. My thoughts on price are around the same as yours. Im going to go round with the vendor over the next 2 weeks. Thanks 

Link to post

Not trying to put you off by any means but this smells a bit to good to be true. If the current owner has 2 lads doing it for him, must be good lads to be doing a 100+ custies a week, and lets say with all running costs it costs him £6k, maximum, a month to run. With modern software packages it would take him, or his Accountant, an hour a day to check everything. This means he's making circa £3.5k a month profit for doing next to nothing.  

Who would sell a round, that takes so little time to run, for lets say 5 x turnover so £45k, when he makes a minimum £36k a year. If he's retiring or in very bad health, I can understand. Personally if I was in his position I'd want 3 years profits / 10 times turnover not 3 x turnover.

This might just be my ultra cautious outlook though.

  • Agree 2
Link to post
Richard Rose
27 minutes ago, Part Timer said:

Not trying to put you off by any means but this smells a bit to good to be true. If the current owner has 2 lads doing it for him, must be good lads to be doing a 100+ custies a week, and lets say with all running costs it costs him £6k, maximum, a month to run. With modern software packages it would take him, or his Accountant, an hour a day to check everything. This means he's making circa £3.5k a month profit for doing next to nothing.  

Who would sell a round, that takes so little time to run, for lets say 5 x turnover so £45k, when he makes a minimum £36k a year. If he's retiring or in very bad health, I can understand. Personally if I was in his position I'd want 3 years profits / 10 times turnover not 3 x turnover.

This might just be my ultra cautious outlook though.

Your point is very valid and I’ve thought about that as well. I really won’t know I guess until I go and take a good look and have a good talk about it. I’m going to work the round for a bit with the boys and see what’s what and see what the sellers thoughts on price are. I’ll let you know how I get on. Thanks for your reply 

  • Like 2
Link to post
Master Jedi Alejandro
2 hours ago, Richard Rose said:

Your point is very valid and I’ve thought about that as well. I really won’t know I guess until I go and take a good look and have a good talk about it. I’m going to work the round for a bit with the boys and see what’s what and see what the sellers thoughts on price are. I’ll let you know how I get on. Thanks for your reply 

Keep us updated!

Link to post
Cghwindowcleaning

is the turnover including the vat or sales before vat?

It does seem quite good with staff already emplace to continue working making a decent profit for little time and effort.

I would be surprised if you could get it for less than 8x around £80k minimum

 

Link to post

Also to consider are the lads coming with the round? 

Will the lads canvas it after you paid for it? 

 

Link to post

Some people just don't have a clue on value. I've bought some work off a chap at about 1.7 ish times the value of the house. Apart from the odd cancellation all of the work has been spot on and in the roads we already cover. 

Link to post
On 10/05/2020 at 16:31, Robt100 said:

Thats working out at a smidge over £10 a house, which isnt much for Norwich. Might have a lot of work ahead! Have you been able to sample the work at all?

Only if they are all monthly, which, if anything like mine, most are longer, 6 week or 2 monthly, some monthly. So prob more like £15 a house? or prob a mix, maybe lot of small quick flats etc too.

Link to post
Posted (edited)

When I sold work to someone who needed a bit more the deal was come and work the jobs with me (for no pay), I'll introduce you to the customer and explain that you'll be taking over the cleaning from the next clean. I charged 2 x clean rate for those. When I've taken jobs of a cleaner that wanted to wind things down he gave me one job for nothing (I bought him a case of beer anyway) and the next job he wanted x1 clean for it. They are two of my best paying jobs.

My only concern with what you are taking on is do you know for sure that you want the hassle of being an employer? Me personally, I don't. I'm really happy not having the stress of managing staff, hiring and firing, managing quality control and the myriad of problems that you'll get. No doubt the rewards will be higher but you'll definitely earn it. Some are happy just earning themselves a very good hourly rate on their own (like me), others want or need more and good luck to you if you do. Not something you should go into without your eyes wide open though.

Edited by Danfire
Link to post

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.