Have any of you had any experience selling a small service business?

PO2 Peter Klein — Mon, 20 Jul 2015 21:56:55 -0400

How did you determine the price and find a buyer.

Response by SGT Richard H. made Jul 20 at 2015 10:03 PM

SGT Richard H. — Mon, 20 Jul 2015 22:03:02 -0400

Finding the buyer is the hard part.
Generally (rule of thumb) the sell price is somewhere in the neighborhood of the value of the assets plus one year gross income.

Response by SGT Alexander Hildenbrandt made Aug 10 at 2015 2:55 PM

SGT Alexander Hildenbrandt — Mon, 10 Aug 2015 14:55:52 -0400

Is your business a franchise? Many things to consider. If you are not having any bites you might consider a business broker. I have one I can connect you to. I am a franchise broker which is a little different. I find people every day that want to get into business, that is how my business works but if you are unable to get it in front of enough people then it will be hard to make the sale. For that reason I recomend a good broker.

Response by SPC Michael Crosby made Nov 19 at 2015 2:59 PM

SPC Michael Crosby — Thu, 19 Nov 2015 14:59:45 -0500

I've bought a small tax practice a couple years ago. I know in the financial industry, you can get anywhere from 1 - 1.25 times gross revenue. Actual price will depend on, among other things, the structure of the buyout, the perceived value of clients (in my field, individual clients are far less valuable than businesses), the reason the seller is selling, length and distance of the non-compete agreement.

I bought my practice using a broker. If your a seller, you will increase the number of potential buyers if you are willing to consider self-financing or an earn-out arrangement.