Selling buisness

I was just recalling the recent WCT article about valuing a business. I started thinking about the guys on this board looking to break into ACD work. Anyone out there thinking about getting out? This might be a good place to get some interest in your business.

I'd sell right now.....for the right price!

Me too; but I wouldn't be able to enjoy the proceeds for very long; my son would kill me!

Just sell your share!

I'm always open to the concept based on the deal I'm being offered.

Dave,

That's a great post.

Just think, a turnkey operation with equipment, vehicles, trained technicians, customer base, referring partners and advertising already in place. You just have to have to keep it going!

I've thought about possibly doing that and teaching/mentoring the new owner for several months until things ran smoothly.
Of course you can't learn this biz in that short amount of time but if you have great people working for you it sure helps.

It definitely takes a solid year to experience all the seasons.

Your business will not be worth as much as you expect...... b John Constalinie (sp) who had been in business since the 80's in Seattle did not get NEAR what I would have thought it was worth,,,....

Is there a formula for selling a ADC business like two times gross business per year or X times cash flow?

I have heard more than once the generic formula is the last 3 years average gross, and I think there is an equipment/vehicle depreciation variable as well. I know this has been the case around here twice. that doesnt mean that all adc bus will sell for that price as with any bus. acquisition ther are many variables; outstanding debt, potential for gowth etc.

As discussed in the May/June 2012 WCT Magazine In The Spotlight article, there are 4 common evaluation methods: sales, assets, cash flow, and market valuation.

Regardless of what method is used the biggest issue is with the buyer being able to finance the purchase. Unlike a PCO firm that has a constant recurring revenue from contracts the majority of WCO firms are always looking for new customers to replace the finished projects. That gives more of an unsecured debt scenario for lenders especially when major assets are not included such as land and buildings.

This is one of the reasons why firms that are trying to acquire companies are only looking for recurring commercial contracts and valuing the offer on that information. Due to the lack of financing available, a good number of sales are owner financed which has the owner accepting a lower than desired amount distributed over a 5 - 20 year timeframe.

x2 I held a real estate license in Florida and sold a few business'. Much of what Eric wrote is very real world and much of that I also discussed on July 25, 2010.

What Is My Business Worth? 7/25/2010

Many times in the business the question of selling one's business or what a business may be worth. We will spend about 30 minutes and discussed some principles of nuisance wildlife control business appraisal.

http://animalremovals.net/what-is-my-wildlife-control-business-worth/



I just remembered I have a podcast about that at least related to this topic. This was the first time I interviewed Dave Schmidt CWCP of St Louis MO who also posts here and has done several podcasts with me since.

Duane "Dew" Haske, Reginald Murray were also part of the podcast.

I also gave a class on how to use spell check on trapperman " Pesky " !!

Dave caught St Louis's first armadillo yesterday. Congrats Dave !!

I'd be gone in a heartbeat if I could get that!!!

Robb,

What is duane haskes' handle on t-man?

Dew !! http://www.trapperman.com/forum/ubbthreads.php/users/6405/dew

Like Vinke said, I have not heard of a Wildlife business selling for anywhere close to what it was worth. Now you take a Wildlife business that has an equal or greater amount of pest control involved and suddenly you've got half a dozen Orkins looking at your customer list. ( And probably recognizing all of them as stolen customers ) Now your company is worth more for the pest control potential. ( Since your customers quit them in the first place, what makes them think they won't quit them again? )

Paul, when selling a pest control business, it is often setup to pay depending on how many are still there after one year. The value of the company is often only that amount. How much they actually make after one year. A company may gross $100,000 a year. After the sale it could drop to $85,000. There is no clause if it goes up. That is my understanding from what I have read about PCO's selling. O(swear word) may not reduce the price if business drops, but that is how small guy's buy other small guy's.
I was actually refered by O(swear word) when one of their tech's made a customer so mad they cancelled service. Regional management reccommended me or another company to take over the service. We had both worked there and they new our work. O(swear word) has good people. They even have good branches. The branch I worked at was good. Then there was some changes in management. Those managers are gone and so is the Branch.

For what it is worth, here is an opinion. There is a difference between being self employed and being a business owner. The value of a business will be greater for a investor that is not required to work in the business (just on the business). Perhaps, this is another reason why ADC businesses do not sell for the value that owners believe it is worth. Your buying cashflow, goodwill, some trucks, and a bunch of traps with raccoon poo. The value is the cashflow and goodwill.

Well said Dave.

The self-employed tradesman owns a business but not one that can readily be sold because *he* is the business. The rest is just a pile of used tools.

Out of the list of assets that John Pearson listed, the only things valuable enough to be important to a businessman are the trained techs and you can't really sell them. They're free to leave at any time.

How could I forget the people! There is value...assuming a good chance of retention.

I agree.

The trained employees of a company are the company's greatest asset. Knowing the tried and true methods of solving problems, and having a personal rapport with your established commercial accounts, and being able to communicate with potential new customers.

In my opinion having the advertising in place is also very important. SEO takes a while to make an impact and creating effective print, internet, radio and TV ads take some trial and error.

Also it doesn't hurt to have "pre-scented" squirrel, skunk and raccoon traps

John, I was going to mention that. I don't know why I didn't. lol

An advertising history is valuable as long as the new owner is going to keep the company name but I'm really not sure how you can determine what that value is.

Years ago I was friends with a guy who had a retail business. He had been in business for twenty years and when he went to sell found his business was worth the sum total of his inventory plus equipment (shelving, counters, cash registers, time clock, etc.)

At first he was a little bitter at being told that all the work that he had put into the business had no value. After a while he got used to the idea and admitted that it really didn't have value....to a prospective buyer. It had great value to himself and his family and he was satisfied with that.

Kinda the same as cash flow history...

Stumbled upon this one.

http://www.bizbuysell.com/Business-Oppor...uUnpQVEUlM2Q%3d

Interesting post and website Dave.

I'm not familiar with that part of NY, but it appears the population of that town is around 1700. I don't know that I could make that kind of money with a small customer base like that.

Interesting. I do know that I would rather buy an established business with a customer base, training from the owner, eguipment, and a proven marketing plan before I would spend money on a franchise. Nothing against franchises or starting yourself from scratch but the things I mentioned have value to me.

From my many years of running a full time business and training several techs over the years I feel it will take someone with little to no trapping experience 5 plus years to get a real good handle on most all aspects of this business.

It takes some a lot longer to learn the techniques and practicing those learned skills to really understand them and be able to adapt to the many different application situations that will arise. So just selling a business to a non skilled individual or experienced individual will and can be quite challenging.

I have a young man that has been with me going on 12 years now that has come a long way. However he was never a trapper prior to his position and he does a good job now. But his lack of a trapping background, sign reading and really understanding what size hole or opening an animal needs to make access to a structure still poses a challenge to him.

Mole trapping is a skill set in itself and using the various types of traps needed in different settings and learning the effective needed set skills to make them productive in all soil and weather conditions.It takes years for some to master some of these abilities.

Some things just dont come easy to some folks that never had that background or the mechanical understanding of various traps and how they function the best. The list goes on. Animal biology and things that only work certain times of the year etc.So selling a business up and running that was operated by a skilled operator and passing it to a non skilled individual can take many years to get on board to run with the same efficiency as the prior owner.

Business value is relative to many variables but most of all it is going to be assessed by past years revenue,current annual operating value,equipment offered as well as any support services if any that will be offered during the break in transition period.

Boo

I'm going to try and be the tie-breaker between Bob's post and Dave K's boo. In real life I am actually Bob. I have done this long

enough that I pretty much know what a normal animal will do before he does it. Besides that, my wife has noted that since a large

portion of our customers are even older than me ( If that's possible ) they actually prefer me to some of our younger techs. (After

all, who else are they going to be able to discuss "Prohibition" with? ) On Dave's side of the coin, I've said this before and I'm

proud to say it again; My son P.J. doubled our business gross the very first year that he joined us and if we could clone him, we

would be a Fortune 500 company in a year. I truly agree with Bob that we cannot easily be replaced but I've been catching critters

since 1955. Even some of the animals have asked me to "hang it up already"! Don't worry Bob, I do enough worrying for both of us.

Funny...I had not read Bob's post. It was a pre-halloween BOO. Got tired of reading that tomahawk thread....and this one was more interesting....so I scared it to the top.

Really, I think the problem alot of people have is looking at it as WCO, instead of business, house cleaning or wildlife control, business is business and all that matters is numbers.

I will be ready to hang it up in 8 years

Got an exit strategy?

cut my losses and go home

Dave, by now everyone must know my exit strategy.

Sure do

When I cross over Jordan I will be retired....not much of a strategy but its an honest one. Never been able to sit around.

Seems a shame to let a good business retire too. Especially, if you can sell it for 3X profit...and give some people a job.

Like to retire when I am 55. Getting cancer and so far surviving it pushed that date up for me. I have a good young guy that helps me out with the business and he is interested in buying it some day. I plan on grooming him and selling it to him.

I am so sorry to hear that Tom! I think it's way past time for every intelligent country to start solving cancer. I'm always at a

complete loss for words when I hear that a neighbor, friend, or relative has been diagnosed. Glad to hear you have a positive

attitude. We're all pulling for you and as Red Green would say; "We're all in this together."

Cure? There are cures out there but we aint gonna hear about it. Aint no money in cures, gotta treat for the money! JMHO

Well no body makes it out alive. You may get Cancer, you may get treatment that prolongs your time, but you are going to die. You can eat all the right foods, never get close to tobacco, alcohol, drugs or any Cancer causing agents. But get hit by a bolt of lightning. Or die in a freak accident. Or get hit by a car while crossing the street. No body lives on Earth forever.
I have come up with a new theory on what Heaven or He.. is like. You experience many things while on Earth. When you cease to exist here you go into an afterlife. If you spent your time trying to be good to fellow people, live happy and ask for forgiveness for your mistakes then you will spend the rest of time remembering the things you did and the people you did them with.
If you do bad things to people and yourself, do not ask for forgiveness then that is what you will spend eternity remembering. In our Human form we are free to make choices. We can do bad things, we can chose to continue to do bad things or we can see the error of our ways and decide to change. When we decide to change, we basically are asking for forgiveness, for what we have done wrong and we get to remember the good things we did.
Doesn't this sound like the answer to LIFE? It does to me. It just has taken 54 years to figure it out.

Well said Lundy.

I will sell you mine for 6 grand right now.

sign the dotted line

X........................

Here is one...
http://www.bizbuysell.com/Business-Oppor...VdROU13JTNkJTNk