Selling Business - How to Determine Value?
After accidentally getting into the snow removal business and growing it to be our areas largest, I have been offered a job offer elsewhere with a great salary and full benefits. With a kid on the way, I need to take the smart route on this one.
Anyway, I want to put my business up for sale and have a couple perspective buyers in line. What I need advise with is figuring what the sale price should be.
I have about $8k in relatively new (only one season) equipment and a few other pieces that have 5 or 6 seasons on them.
I have two seasonal contracts with two years left on them. Each pays about $14k per season. In addition to the seasonals, I have six per push and hourly contracts that have a five year average of $11k each.
I have also included two seasons worth of consulting for the buyer. The business is also debt free.
$9,500 worth of equipment
$94,000 per season of potential income with $28k guaranteed
Two years of consulting
Debt free business
Since no customer is ever guaranteed, I really have to eliminate the fact that there is any potential income. Therefore, I am really down to the price of the equipment and my consulting time.
In my mind, the negotiations should start at $12,500. Am I close? Way over? Under?
SOLD IT ALL!!