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How to roughly value a small business - service industry ?

Slammeddeluxe
Posts: 20 Forumite


Hi
Look for some guidance on how to value a small service business please ? Nominal assets - no land or property - I work from home. Established 22 years. Thousands of repeat clients. Thanks
Look for some guidance on how to value a small service business please ? Nominal assets - no land or property - I work from home. Established 22 years. Thousands of repeat clients. Thanks
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Are you buying or selling?
If you are working from home who's actually delivering the service? Are you a one man band? You've staff delivering it? A Third Party?0 -
I am selling. I work mainly from home. Have 1 x staff an administrator. I do see clients either here or at their home. Please advise how any of this is relevant to the valuation of the business ?0
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Basically you're selling a client list plus possibly some "tools of the trade", plus an employee who may be TUPEd over or who you may be making redundant. Perhaps also some goodwill Not knowing what the business actually does, how can anyone guess what it's worth?
Anyone with any business nous would realise that whereas a client may be happy with Slammeddeluxe providing the service, would they be happy with the new owner's service. That is always the problem with a one person operation, that person is whom the client knows and the client for various reasons may decide not to continue with the new ownerIf you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales0 -
Slammeddeluxe said:I am selling. I work mainly from home. Have 1 x staff an administrator. I do see clients either here or at their home. Please advise how any of this is relevant to the valuation of the business ?
It's a "service business" but what type of service do you offer? That does make a difference as there are some sectors (say, Accountancy) where selling the client book on retirement is relatively common. Other sectors (say Architect working in the domestic sector) where the value of the historic Client base is less transferable.
Is the staff administrator a fully "open market" employee on a proper contract and you'd plan to sell them as part of the business, or is that really referring to a close family member?
Once you have the basic, there are various factors that will influence the value of the business, including:- ability to replace you in the business
- cost to enter - start up from scratch rather than buy your business
- liabilities that come with the business
- turnover and profitability (when presented as a genuine business paying staff salary, not Director-Owner dividends)
- etc...
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Slammeddeluxe said:I am selling. I work mainly from home. Have 1 x staff an administrator. I do see clients either here or at their home. Please advise how any of this is relevant to the valuation of the business ?
Who's interested changes if they have to provide the service themselves -v- are buying a solution that includes fulfilment.
Ultimately anything is worth what someone is willing to pay and what someone is willing to pay depends on how many bidders there are. You can find many online calculators but these assume it's not a one man band. They tend to be worth much less unless you find your doupleganger1 -
Slammeddeluxe said:Hi
Look for some guidance on how to value a small service business please ? Nominal assets - no land or property - I work from home. Established 22 years. Thousands of repeat clients. Thanks
It really depends on so many things that we don't know - especially with service businesses as so much of that is often dependent on the person supplying the service. It depends a lot on the nature of the service also.
The short answer is 'probably less than you think it is' but talk to a broker or three and see what they say.
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