General Cleaning Issues - Floorcare, car valeting, buying and selling businesses, pricing, staffing, market research, etc.

Help-Company financial Value
Posted by petra (petra), 30 January 2004
Ok, how do I find out what a Company is worth finanicaly..
Hope you clever guys and girls can help me.
Petra
Ps It is a cleaning company
Posted by Scots_cleaner (Scots_cleaner), 30 January 2004
Hi petra it all depends on the turnover you work it out from that .
Your accountant should be able to tell you that!
Posted by Mike_Boxall (Mike_Boxall), 30 January 2004
Hi Petra

Companies house is the first place to start if it's a Ltd company. The only problem is that the accounts can be up to 19months old and if there's a group structure sometimes it can be misleading.

Is it a Limited Company you're looking at? Do you have the Company registration number to hand? If so, send me a message and I'll check it for you.

Regards

Mike
Posted by petra (petra), 30 January 2004
No it's not ltd, it is a sole trader selling wanting to sell all stock and contracts, I know that the contracts are good and established and that unless on of the customers went bankrupt they are safe.
Petra
Posted by Mike_Boxall (Mike_Boxall), 30 January 2004
on 01/30/04 at 16:47:36, Scots_cleaner wrote:
Hi petra it all depends on the turnover you work it out from that .
Your accountant should be able to tell you that!


Net profit is a better indication. Most larger businesses would look to pay 5 x 1 years net profit but there are lots of other factors to take into account (stock, directors / proprietors salaries etc) but I do agree that you need an accountant to look through the full accounts.

Do you have a copy of the accounts?

Posted by petra (petra), 30 January 2004
thanks Mike
Posted by Fox (Fox), 30 January 2004
Hi Petra

There are many ways to value a company but one of the simple methods I use is 30p in every £1.  However this will only give you a ballpark figure.  With cleaning companies alot of factors come into play such as what type of contracts are run, the % profit, whether you are buying as a whole or just the good will, liabilities etc.

At the end of the day any company is only worth what someone is willing to pay for it!

Regards
Fox
Posted by Scots_cleaner (Scots_cleaner), 30 January 2004
If its a sole trader offer 3 times his monthly turnover!
Posted by petra (petra), 30 January 2004
cheer fox, All Im would be buying is paid for stock, equiptment and contracts, they are keeping all liablities.
Petra
The turn over is approx £39K per year


Posted by Mike_Boxall (Mike_Boxall), 30 January 2004
on 01/30/04 at 16:56:02, Fox wrote:
but one of the simple methods I use is 30p in every £1


Hi Fox

Do you mean 30p for £1 of turnover?

It is very difficult to generalise but I would certainly base any offer on profit rather than turnover.

Regards

Mike

Posted by Fox (Fox), 30 January 2004
Hi Mike

Yes I do mean that - it is very generalised however it gives an indication whether the asking price is in the right region (with lots of leeway granted)

I agree on the best way to price is profit but if you have a list of Companies infront of you that are selling, are you going to go to the trouble of checking everyones books?  

I have sent Petra a pm suggesting she take all figures to bank and accountant to get them looked over.  This is always a must when seriously thinking of buying.

Regards
Fox

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