Thread: How much does a CC co sell for?

I'm not getting ready to sell, but I am setting my long term goals and considering my exit strategy.

How much does a cc co sell for, in terms of revenue, or net? Are there any general metrics, like 2x revenue, or 4x net, or if owner/op then 1x rev, 2x net? I will make some of my plans based on their eventual saleability.

Umm...

Most carpet cleaning companies sell for the value of the equipment plus some modest amount for the list of accounts. Sad but true fact.

A carpet cleaning company - or any business- needs to be seen as a profitable company rtaher than a job if it is to sell for much. So after paying all expenses including paying yourself for labor and benefits that go with most jobs, how much profit is your company making?

The company must also be able to attract potential buyers outside the community of carpet cleaners. Otherwise you have a very limited market. Most others cleaners would hope to just wait until you close the doors and then get your customers. Really a limit market. But if your carpet cleaning company really runs like a business with systems and routine for doing everything, someone who is not a carpet cleaner might want to buy that business.

If he isn't busy doing something more important, such as saving earthquake victims, my arch rival of the bulletin boards, Steve Toburen will probably be along to give a longer explanation and offer a free report on the topic. He has actually accomplished this on a much larger scale than I did. I think he will tell you that signed contracts for work commands a much higher price than just a list of customers.

I did go to SFS--I remember them saying that an o/o cc co isn't worth anything. I guess that means I should set it up with someone else running it, but that means more trucks, more leverage...I have to think about what I want to happen here.

Read The E-Myth, upon Scott and Steves recomdation I am about half way through it. Great book.

Originally Posted by Scott W

Most carpet cleaning companies sell for the value of the equipment plus some modest amount for the list of accounts. Sad but true fact.

A carpet cleaning company - or any business- needs to be seen as a profitable company rtaher than a job if it is to sell for much. So after paying all expenses including paying yourself for labor and benefits that go with most jobs, how much profit is your company making?

The company must also be able to attract potential buyers outside the community of carpet cleaners. Otherwise you have a very limited market. Most others cleaners would hope to just wait until you close the doors and then get your customers. Really a limit market. But if your carpet cleaning company really runs like a business with systems and routine for doing everything, someone who is not a carpet cleaner might want to buy that business.

If he isn't busy doing something more important, such as saving earthquake victims, my arch rival of the bulletin boards, Steve Toburen will probably be along to give a longer explanation and offer a free report on the topic. He has actually accomplished this on a much larger scale than I did. I think he will tell you that signed contracts for work commands a much higher price than just a list of customers.

Wow, Scott, well said! In fact, I think YOU are ready to step in and fill my shoes at SFS! Are you busy next week? (Especially if it meant A week in SUNNY, WARM FLORIDA???)

Actually I don't know when we will start the reconstruction work for Haiti. We learned after Hurricane Georges here in the DR all about the "Ready-Fire-Aim" syndrome. Once the immediate needs of rescuing trapped people, food and water have been met it is better to get your Infrastructure in place before you invite in massive amounts of volunteers. (You don't want to know how I learned this ten years ago!)

Lots of good comments above, Dan. Even yours when you said, "I have to think about what I want to happen here." Sadly too many carept cleaners just sort of lurch through life without ever making a decision on what they want out of it!

And yes, Scott is right- I do have a very popular Report on how to PREPARE your business for it's eventual sale. plus it does include a very complete worksheet on how to calculate a selling price for your company. Just go here:

http://www.strategiesforsuccess.com/...pecial-reports

and then click on the link: "Cashing Out: Preparing Your Business for It's Eventual Sale" The download is free.

Steve
www.StrategiesForSuccess.com

PS Dan, with respect I don't believe I ever said "an O/O business isn't worth anything." Instead, I stated that if you make a decision to stay small don't count on the sale of your company for all of your retirement income. Just get your personal Investment Plan going and fund it from the higher prices we teach you to get in SFS!

Originally Posted by Steve Toburen

Lots of good comments above, Dan. Even yours when you said, \"I have to think about what I want to happen here.\" Sadly too many carept cleaners just sort of lurch through life without ever making a decision on what they want out of it!

And yes, Scott is right- I do have a very popular Report on how to PREPARE your business for it's eventual sale. plus it does include a very complete worksheet on how to calculate a selling price for your company. Just go here:

http://www.strategiesforsuccess.com/...pecial-reports

and then click on the link: \"Cashing Out: Preparing Your Business for It's Eventual Sale\" The download is free.

Steve
www.StrategiesForSuccess.com

PS Dan, with respect I don't believe I ever said \"an O/O business isn't worth anything.\" Instead, I stated that if you make a decision to stay small don't count on the sale of your company for all of your retirement income. Just get your personal Investment Plan going and fund it from the higher prices we teach you to get in SFS!

I paraphrased you poorly! I meant essentially what many posters are saying, that if it is owner/operated, it will be worth little more than what the equipment is worth at the time of sale. Thanks for the report--I needed to be reminded of those. I'll have to save this 42-pager for the weekend.

Originally Posted by Richard Baldwin

I have to disagree with the whole "worth only the equipment" thing. Your business is worth much more than that. Some potential buyers will try to tell you its only worth the resale value of your gear, but dont be sucked in. Look at other businesses around you and how they do it. I was a manager of Can Tire Gas Bar at one time. Each gas bar is an individually owned and operated franchise. You pay hundreds of thousands of dollars for the right to sit there and sell pop and chips for profit and the gas you make zero on. You have basically bought yourself a job. You will work at that job for 20 years and still never get your money back. Our business is a career. The buyer is purchasing a career that you spent years setting up. Tools, equipment, clientelle, training package and all the trial and error that you paid for and they can benefit from at your expense.

If someone is interested in buying your business, its because they are not interested in spending years building up their own. They want something already pre-fabbed that they can just step into and take over and not have to endure the years of empty fridges and hard earned mistakes it took to get it there. And that is what they are paying for.

I used to play an online video game. Your character starts at level 1. After months of playing he finally reaches level 50. I sold that character to someone who didnt want to do the work for $350.00 They took over the character and continued playing him at level 50. Why is selling my business any different?

If I make a video CD. of a one hour presentation of how to run your cleaning business and perform at an outstanding level, the CD itself you buy is worth less than a dollar. Am I only going to ask for the price of what the CD cost me? Minus depreciation? Umm.. no. Why? Because you are not buying a CD, you are buying years of appreciated learning and hard work. You are buying the skills that took another years to build up and for that already built up knowledge you are going to pay at least $100 for that CD. Why should selling my business be any different? You have the know-how , clientelle, equipment and everything else already in place, and if it were a franchise I would probably ask a lot more just because of the name recognition and support from the rest of the company.

This business is not only my career. It is my retirement package. Im not giving years and years of my hard earned savings to a bank only to have them keep half of it when I need it back, no, Im investing in this business instead. If and when the times comes to sell it, I request enough to retire. IF nobody is buying, I wont retire. If I cannot work, I pay others to do the work. There is always an answer.

Wises words in here, I guess the point is do not wait until you “need” to sale your business because you cant walk any more, that will put you in a position of “neediness”, if you want to make a good sale you get show that you are a winner. In another words “ you want buy and make money good, you don’t want buy GOOD”

These are great answers! And they are why I asked. I'm not ready to bail, but I don't want to get to that point and say, "if only I'd turned it into a turnkey operation."

Originally Posted by bonesheal

These are great answers! And they are why I asked. I'm not ready to bail, but I don't want to get to that point and say, \\"if only I'd turned it into a turnkey operation.\\"

Our members tell me they take much more out of SFS the second time around, Dan. Maybe at this point in your life it is time to come back to Strategies for Success and in the process do some serious soul searching???

We are standing room only next week in Tampa but last time I checked there were seats left for the Dallas SFS- February 15-19.

Steve
www.StrategiesForSuccess.com

PS Jeremias, I agree 100% with your statement: "I guess the point is do not wait until you “need” to sale your business because you cant walk any more, that will put you in a position of “neediness”"

Sadly, 95% of the carpet cleaners I know who try to sell wait too long to START THE PROCESS! Here is an excerpt from another Report available on our website:

"Your mission, starting today, is two fold. You are going to save and invest so that you gradually build personal net worth outside of your company. At the same time, you will build such a perfectly tuned cleaning operation anyone can and will want to own it. Remember, your business should run so beautifully that a prospective buyer will lust to possess it. As an old friend told me once, “When a prospective business buyer can visualize his name on the office door, it’s all over but the negotiating”. The Business Sale Preparation Process will give you the tools to build a fun, exciting business now ... and a valuable, extremely desirable asset to sell, if and when you choose to leave."

Just look under the "Resources" section on the topic bar of www.StrategiesForSuccess.com The download is free.

I'll be back one day.