Value of a business

RichardV6

Hi Folks,

Looking for some general advice I have googled looking for information but havent found a lot specific to my sector, so here goes.

Looking to eventually sell a family franchise business, owned at the present time by myself as a sole trader.

Some ball park figures,

T/O 150K and rising steadily over past years
GP 40-50K and again (thankfully rising in line with T/O)

Strong local image and reputation, national franchise (well known), completley mobile, all phone numbers etc included. No premises.

I was approached by someone with a view to selling. I hadnt planned on selling just yet, instead I was ready to commence an expansion phase, however this got me thinking. I'm trying to put a value on the business, this type of franchise does not come up for sale often. We have many large contracts with local firms, we also have an agreement in place with a very large UK company to work on there behalf as subcontractors. The industry sector is pretty much in a growth phase, margins are good and local direct competition is light.

How do I possibly come up with a figure?

Entry costs into this franchise sector start at circa £30K however £50K is advisable, so what is a 6 years established business with an excellent reputation likely to make?

I realise that this is probably like asking "how longs a piece of string?" but I will give it a shot anyway, thanks for looking at my post.

Regards

Richard

Savvy_Sue

As you know the answer is "What someone's willing to pay", but to be more helpful, I think if you search this forum for valuing a business (might need to do value as well as valuing) we have discussed it before, a while back ...