How do I go about selling a promotional supply business. It is currently generating $350,000/year with a diverse client base. How do I value the business?
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#2
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Posted 17 February 2010 - 07:13 PM
Do some research on different methods of business valuation. Specifically, the magazine Inc. produces an awesome yearly issue that illustrates very clearly benchmarks for different industries at different revenue levels. They've been doing it for many years, so it has some credibilty.
I'd also consider calling a business broker.
I'd also consider calling Proforma....
Last, I'd probably assume that I would have to stay on as a consultant for sometime, and accept payment based on clients retained over a certain time period.
I'd also consider calling a business broker.
I'd also consider calling Proforma....
Last, I'd probably assume that I would have to stay on as a consultant for sometime, and accept payment based on clients retained over a certain time period.
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#3
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Posted 18 February 2010 - 11:14 AM
Ty,
Thank you for your response! We appreciate your input.
Good Selling,
Frank
Thank you for your response! We appreciate your input.
Good Selling,
Frank
#4
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Posted 26 February 2010 - 03:22 PM
Frank, if you go to any of the big trade shows, usually there is somebody there who is a broker who specializes in the business.
I always too wondered what my business is worth, especially if I was willing to work it for a year to keep the clients.
I always too wondered what my business is worth, especially if I was willing to work it for a year to keep the clients.
#5
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Posted 17 April 2010 - 04:01 PM
I have bought and sold many businesses, several in the ad spec industry.
The # 1 mistake everyone makes is keeping the fact that their business is for sale a secret. Put a big *** banner on your web site saying "this business is for sale", if no one knows it is for sale..you will not sell it. Your competitors or your clients may be in to make an offer, you never know who has money.
Don't use brokers, they do nothing, they will try to charge you for market evaluation etc. This will list the business and want 10% of the sale price. If it doesn't sell in a few months they will come back and tell you it was priced too high, they are only in it for the commission.
Post the business for sale on here, on kijjiji, craigslist, mergernetwork etc etc etc
and don't be a pig, greed will not work.
Figure out what the business profits per year, multiply that x 3 and you are close to the value.
Be willing to finance a portion back to the buyer to show them that you are standing behind what you are selling (I charge 8% for my money)
Good luck, feel free to email me if you want any help
Rick
The # 1 mistake everyone makes is keeping the fact that their business is for sale a secret. Put a big *** banner on your web site saying "this business is for sale", if no one knows it is for sale..you will not sell it. Your competitors or your clients may be in to make an offer, you never know who has money.
Don't use brokers, they do nothing, they will try to charge you for market evaluation etc. This will list the business and want 10% of the sale price. If it doesn't sell in a few months they will come back and tell you it was priced too high, they are only in it for the commission.
Post the business for sale on here, on kijjiji, craigslist, mergernetwork etc etc etc
and don't be a pig, greed will not work.
Figure out what the business profits per year, multiply that x 3 and you are close to the value.
Be willing to finance a portion back to the buyer to show them that you are standing behind what you are selling (I charge 8% for my money)
Good luck, feel free to email me if you want any help
Rick
#6
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Posted 18 April 2010 - 01:55 PM
Rick, I have heard that 3x multiplier before too as a gauge. for 3x does a person have to work for the company or does 3x here is my stuff see you later.
I am not looking to sell but just curious.
I am not looking to sell but just curious.
#7
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Posted 18 April 2010 - 07:16 PM
Normally there will be a time line on the sale, meaning that you have to put in "X" hours with the new owner to ensure that the transition is smooth.
The last business I sold has a consulting agreement attached saying that I will be available for up to ten hours per month should my advise and expertise be needed.
Every deal is different, as long as it is approached with common sense things normally work out.
The last business I sold has a consulting agreement attached saying that I will be available for up to ten hours per month should my advise and expertise be needed.
Every deal is different, as long as it is approached with common sense things normally work out.
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