Wednesday, August 1, 2007

Selling your business

I got a call from a guy I know this week wanting a price for my business. He does it part time & wants to jump to full time. It was easy to price my equipment, but the accounts were more difficult. I have zero under contract and most are residential. So this makes it harder. There is great risk for the buyer as there is nothing stopping the clients from dumping him like an annoying girlfriend after he takes over. So this gives the appearance of little value in buying clients. But if I can make the transition seamless & make sure all the work is done the same I believe it could work. I would work with the buyer for a few weeks until he was able to take over & serve my customers exactly like I had. There would be a few drop simply because they did not choose the new guy, like a new GM firing a Coach whom just happen to be there when he arrives.
I had read a few posts about selling accounts for 2 months gross, which I found ridiculously low. I would just end the business with no one buying them before I did that. We work hard to get & keep good clients so we should not just give them away. Now some have suggested that the buyer could pay some at the start then a percentage for each client that stays for a year. This moves the risk to the seller. If the buyer does not do a good job or goes crazy & runs off with his high school sweetheart the seller has been screwed. I priced my biz high to the guy because I am in no hurry to get out. When I get in a hurry I will get a decent price or I will let someone work it while I get the work and basically run the business. We can’t sell ourselves or our business short.

Lawn Store

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