Value of my business?!

[5 Star Johnny 14]

Fellow Owners! I am in the process of refining our company's business plan, which includes a defined exit plan. I have combed through several of the previous threads discussing values of PW businesses for sale, but I believe I have a unique sales point that does not mirror other discussions. What I am ultimately looking for is some professional feedback on what I should ask for, in total, to sell my business if it happened today. I am actually in the process of discussing this with three (3) larger PW companies in my immediate market, on the assumption that they may have the opportunity to buy me out in the future, should I decide to exit.

Here are the "rough" (but close) figures as of today: (numbers are consistent for the past three years.)

Gross Annual Sales: $150K

Gross Net Profit (before tax): $35K

Secured/Unsecured Liabilities: $0

Equipment: (No value of sale is being attributed. For sale at market pricing)

Annual Deck Maintenance Accts.: $65K

Here's the wild card. We secure a four year, annual deck maintenance contract for each deck client we service after the initial restoration. We go back each spring and clean the deck, and apply a maintenance coat on the horizontals. We receive a fee for this service each season. The total number of decks at the end of this season will be over 200. The attrition rate each season is less than 10%. Clients that have reached the maturity of the contract this year are "clammering" to know how to continue the program. A program is in place for them to continue 1 - 3 or 5 years.

Unlike some of the other threads I've seen that involve mostly commercial accounts for sale, I have a "guaranteed" continuing sales oppportunity for a potential buyer. My plan would be to commit to providing a transition strategy, ensuring the highest percentage of contracts transferred to the buyer.

What I'm trying to convey is that I don't just have a large client list for sale. But rather, a sizeable list of "contracted", active clients over a period of years.

I realize there are variables, but could really use some input as to what a realistic expectation of asking price for my business should be. I can fill in the blanks as the thread continues. I look forward to some intelligent and business professional's advice. Thanks in advance.

[Tegrey 121]

John,

Business with customers are only good for you, unless they sign a contract with the new owner? Having no equipment value, your yearly income and debt means nothing. Everything in a sale, must be tangable. If I have nothing you can hold, You have nothing? A friend sold his business last year. He had vehicles, equipment, signed contracts for the new owner, bank statements for the last 10 years, etc. All this adds up. If you are serious, I'd check with a banker, business specializing in exit strategies. They will set you on the right road. One would be to sell your business to your employees or family over a period of time. My 2 cents. Thank You.

[5 Star Johnny 14]

Business with customers are only good for you, unless they sign a contract with the new owner? Having no equipment value, your yearly income and debt means nothing. Everything in a sale, must be tangable. If I have nothing you can hold, You have nothing? A friend sold his business last year. He had vehicles, equipment, signed contracts for the new owner, bank statements for the last 10 years, etc.

Yes, good points. The transition strategy would include having new contracts signed for the new owner. We have 6 years of bank statements. All accounting is above board. I didn't include equipment value, as this is usually subjective to current market value sale prices, and potential buyers may or may not need it.

That being said, and assuming I can get 90% of contracts transferred that will guarantee income over the following 4 years, can anyone offer input as to the range of business value?