Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Crystal-clear on November 22, 2012, 08:47:34 pm
-
we see silly rounds for sale quite often £200 per month for £2k with maybe a £300 van chucked in insane.
but sometimes i hear that some of these even sell? , if they are selling this has to get ones mind working most of us wouldnt dare buy a round for 10x but maybe there is a market out there, every year after say you establish £200 worth of of work maybe sell it at 10x and just recanvass it and sell it again what i just dont understand is why would people pay 10x :o so lets see how many
Yes, we get ;D
and please post your reasons because i might just try selling a days work a year and have a free holiday lol...
-
If it was established commercial work, that could be completed in any weather & yielded a very good average hourly rate - then yes. It'd have to be good though!
-
as mr jones said. good advice
-
+1 its a good way to get up and running in the fast lane
-
not in a million years, and especially if commercial, could lose the lot before you made your money back
-
Definitely not for commercial nowadays, too much risk. I would be tempted if it was say 15 £20ish bigger houses in one street. A nice days work and well paid! Would need to be well established and i would need to meet every customer. Maybe a clause in the sale contract about cancellations too. I wouldn't be tempted for normal average priced domestic houses that are usually a bit more spaced out, 3-5 cleans for those. Prime work is an investment, it may take a year to get your money back but you still always have the value of the investment in the round you've bought and get the return if sold on.
-
intresting we have 5 yes people here so far i can see 3,
by the way this is just a domestic post althou i dont mind feedback if it was commercial too
personally the last for me would be commercial high order value cleans as you may only get say 1-3 jobs for £2000 imagine if 1 or 2 of those commercials say "errr yea great that you have taken over but can we knock it on the head for a year" ;D
but if it was say 13 houses priced at £15 each at least you will have 9 left ;D still for 2k you gota be mad!
-
10 votes for yes out of 32 about 30% thats quite high :o
-
For cleans only no, as a business I would think hard about it
-
This must be the only industry that sell an asset based on a turnover when 99% of business sell assets based on net profit.
Its reasons like this that will prevent us from getting the respect and trust we desire and deserve. We could all do so much better if we had a understanding of business.
I am tired off reading about H & S courses that are really useless after you have attended the first one. Give us business courses so we can understand our businesses and sell them for fair prices for both parties. O K you can all draw your guns now. ;D ;D ;D ;D
-
This must be the only industry that sell an asset based on a turnover when 99% of business sell assets based on net profit.
Its reasons like this that will prevent us from getting the respect and trust we desire and deserve. We could all do so much better if we had a understanding of business.
I am tired off reading about H & S courses that are really useless after you have attended the first one. Give us business courses so we can understand our businesses and sell them for fair prices for both parties. O K you can all draw your guns now. ;D ;D ;D ;D
there are plenty of business courses out there, no guns
-
Personally no, but 90 percent of the work that is for sale in Lancashire goes for between 9 and 10 times for domestic work :P
-
The above is true that when buying a business it is the mutiple of net profit that is usaually the factor that the sale price is based upon. Ithought about selling up a few months ago and i spoke to a business transfer agent who told me it would be very difficult if selling the business as an ongoing concern to get any multiple of turnover , he said that my business which is heavily weighed domestic split (goodwill of the customers) i could only achieve 100% of net profit plus assets. Of course its all down to the individual what they think its worth but his advice was that finding an individual who would be prepared to pay more than that would be difficult.
So by my estimations if i was to sell my work alone at 4 x monthly turnover i would get double annual net profit and if i could get 10x mothly turnover i would be getting 5 x annual net profit.
Im not sure that i could find anyone willing to pay 10x , but if anyones interested at that price then i have a large round to sell Surrey , Sussex and Kent. ;D
-
Mr Rogue TRADER you are the voice of reason is a world of insanity. Your added thread hits the nail on the head.So after I read about some one wanting to sell a round for 10 x turnover and thinking you will never get finance at a bank for that. There must be a lot of cash around to buy these high risk purchases.
-
It's a no from me.
What really are you buying when you buy a round commercial or otherwise?
You have no guarantee that ANY of the work will still be yours in a year or even 6 months from now.
Residential customers often like a windy that they know so when you buy work you always lose some of it.
Commercial work comes and goes very quickly.
September 2010 I had two contracts turning over £1600 a month, profit after all work done was £900. October 2010 they were gone, it was OK I always thought they might not last so always looked after my other work.
According to some of you, you would pay £16000 for it. Not sure I would agree based on experience.
If anyone wants to buy my work at 10x I'll bite their hand off, its all good work, I've had some of it for about 8 or 9 years, but it can all go in a month or two.
-
I tried to sell work at 10x, never sold it, but what gets me is why people from other parts of the country feel they need to put there opinion in about it, it has nothing to do with them, we live in a world where not a very nice persons pay a fortune for a piece of crap art or a bottle of wine, the price is what someone is willing to pay whether it be 3x or 20x, you cant loose anything but advertising at 10x so why not try, if it doesn't work you drop price to what the market will pay.
-
as i ve said before i would do and i have done. i bought a commercial round for 10x the monthly value. its fantastic work, any work i've lost i have more than replaced. this question is redundant without a context. it can either be a terrible decision, or a fantastic decision, all depends on what youre buying and whose buying it.
-
no way would i pay 10x for work, its not hard at all to get well priced custys on the books,
knock a few doors and post some flyers instead
-
I haven't voted because there is no "it depends" option.
-
The thing iis that as a one man wc round, you aren't really selling a business in the sense that selling business with employees is. In effect you are just selling a job. Ok, the income from a good wc round is likely to be better paid than a factory job.
-
In the last 3 years I have seen the selling prices go from 3 x the monthly to 7 or 8 x the monthly in my areas.
i know for sure as i have both bought and sold at these prices.
Will they get to 10 or 12 x the monthly ?? .... cant see it myself.
Mosy buyers when 3x the monthly happy with a handshake and gut feeling when handing over money i rekon to get to 10 /12 the monthly they would want to see contracts but who has a contract on a residential customer and even if they did customer can still cancel.
-
At 10 /12 the monthly defo a good idea to canvass, clean a few times and then when all settled sell it on.
Thought about this a few times but cleaning windows a lot easier if boring though ;D
-
I bought my first rounds, one for £500 and one for £3000
Even if half of them cancelled it gave me the foundation to grow my business to the size it is now
What is that £3500 worth now,
How much have i earned off that £3500 ?
You got to look at the bigger picture, the money you pay for the round does not dissappear
-
Buying work will always have an element of risk, after all you are purchasing a lot of good will.
In my experience for what its worth I have only bought work once, and the reason I did was because it was in a very affluent area, very compact, I already had work in the area, priced fairly and I saw the potential.
I got this work in 1998, so fourteen years ago and in that time apart from death or moving kept most of them and it led to getting more work.
I voted yes as in my case it more than paid off.
Steve
-
Here goes with a bit of controversy - people on here hate maths, so I expect an attack.
Buy £1,000 of monthly work for £10,000.
Rent it to someone for 20% of turnover (the going rate in my area).
You get back £200 per month, or £2,400 a year for your £10,000 investment.
You still have £10,000 worth of assets (i.e. you can sell the round on) and you've made 24% on it without doing a stroke of work bar banking the renter's cash.
A quick look around finds the best cash ISA paying 3.3%
Suddenly 10x looks VERY cheap.
Vin
-
Here goes with a bit of controversy - people on here hate maths, so I expect an attack.
Buy £1,000 of monthly work for £10,000.
Rent it to someone for 20% of turnover (the going rate in my area).
You get back £200 per month, or £2,400 a year for your £10,000 investment.
You still have £10,000 worth of assets (i.e. you can sell the round on) and you've made 24% on it without doing a stroke of work bar banking the renter's cash.
A quick look around finds the best cash ISA paying 3.3%
Suddenly 10x looks VERY cheap.
Vin
No, because your asset will be dwindling with customers dying, moving etc.
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.
Nothing wrong with buying rounds in principle.
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.
Nothing wrong with buying rounds in principle.
Why? Because you make that a condition of his renting the work. A sane man wouldn't rent a round on a nod and a promise; there'd be an enforceable contract.
Vin
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
The same maths would give a 42% return. Even nicer.
Vin
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.
Nothing wrong with buying rounds in principle.
Why? Because you make that a condition of his renting the work. A sane man wouldn't rent a round on a nod and a promise; there'd be an enforceable contract.
Vin
A sane man wouldn't rent a round where he is expected to pay 20% on work that you don't have. Why would he pay you 20% on work that he has to canvass himself? You would have to replace the work for him.
-
Steve
you put into the contract that if he loses one of yours he replaces it, I am sure both parties would agree that from the start, even so it wouldn't be that hard for you to replace a couple yourself to keep the agreement rolling.
-
not if all lost customers have to be replaced by the rentor,
i would go for 35% myself
Why would the renter pay 20% or 35% of work he picked up himself? It isn't logical. It's a nice idea in theory, but it falls down because your asset would be dwindling.
Nothing wrong with buying rounds in principle.
Why? Because you make that a condition of his renting the work. A sane man wouldn't rent a round on a nod and a promise; there'd be an enforceable contract.
Vin
A sane man wouldn't rent a round where he is expected to pay 20% on work that you don't have. Why would he pay you 20% on work that he has to canvass himself? You would have to replace the work for him.
Bear in mind that they might well not actively have to canvass new customers; you know as well as I do that you get stopped and asked just by being out there.
Also it depends upon the deal you're selling. If you are renting the round on the basis that they replace, then they can either take the deal or not. You might not take it; doesn't mean no-one would.
You're seeing the negative. Try looking at what's in it for them. Perhaps they would see that they get a round th day after signing without needing any capital or any time to build up and consider it worth the 20% (or 35%!) and the need to replace any customers they lose.
Vin
-
You are getting closer to franchising or employment than renting in that case. My understanding of the way renting works is obviously different to yours. If I was "renting" I would not expect to pay "rent" on work that I have picked up. I think it is the word "rent" or perhaps my understanding of it that is the problem in the scenario you describe.
-
I agree that you would never rent on that basis as you've got the drive and capital to build up a round of your own.
For someone with just enough cash to buy a van, he could speak to the renter on a Friday and start cleaning a full round on the Monday. Plenty of people would pay 20% plus "replace all lost customers" for that deal, as they would have cash flowing into their pocket in three days. Much better option than starting from cold. They might keep 100% of turnover starting out alone but it's a daunting prospect (as you'll remember from when you started). It also might be a year or two before they were any better off starting on their own.
I should point out that I won't ever be renting work; I only used the point to give a basis for pricing. Too much is posted on here as though it's based on some magic formula when there's no logic to it. I include "3x - 4x monthly to buy work" and "£1 a window" in that kind of received wisdom. I was trying to highlight something that shows 10x to be pretty good value for the buyer who does it right.
Vin
-
whatever you pay,its a positive, you are getting a foot farther up in the biz. whereas keeping your money in the bank doesnt get you anywhere far
-
I agree that you would never rent on that basis as you've got the drive and capital to build up a round of your own.
For someone with just enough cash to buy a van, he could speak to the renter on a Friday and start cleaning a full round on the Monday. Plenty of people would pay 20% plus "replace all lost customers" for that deal, as they would have cash flowing into their pocket in three days. Much better option than starting from cold. They might keep 100% of turnover starting out alone but it's a daunting prospect (as you'll remember from when you started). It also might be a year or two before they were any better off starting on their own.
I should point out that I won't ever be renting work; I only used the point to give a basis for pricing. Too much is posted on here as though it's based on some magic formula when there's no logic to it. I include "3x - 4x monthly to buy work" and "£1 a window" in that kind of received wisdom. I was trying to highlight something that shows 10x to be pretty good value for the buyer who does it right.
Vin
I think 10 x is ok if you are buying work and absorbing into a round with multiple vans. As long as the work is well priced, it will increase the value of the business and profit.
-
its true vin , the return would be amazing , nothing would give you that return but we cant look at it as simple as that! , cancelations , the renter might muck it up etc etc, however its ture if one could make it work 10x wouldnt be alot, the main reason why i wouldnt pay 10x is because you are entering the unknown and althou it could pay off there is no guarantee and 10x is too great the risk should poop happen ,, i think 3-maybe 5 times max is worth the risk!
-
Nope, think how long you'd be working for to regain it. If you spent all that time canvassing properly (where I am anyway) you'd be quids in.
Not to mention (personally) I'd feel more secure knowing I had a wedge of cash in the bank I could lay my hands on.
Only my 2p's worth though
www.laneswindowcleaning.com
-
Would neither buy nor sell my hard earned round for 10x, not even 20x for that matter.
-
I don't agree that the subcontractor should replace lost work. It's totally possible for work to be lost without any blame attached to the subbie.
It's nothing to do with "blame".
Look, you can set any conditions you like into your contract. You can insist they work with one trouser leg rolled up above the knee and wear a red bowler hat if you want to. If they want to accept it and sign the contract then that's the way it is.
So, create a contract whereby they rent the work and one of the conditions is that they replace any lost work. They don't have to take it but someone will for the quick start it would give to their business. Plus, let's face it, if you're out and about cleaning windows, you gain more customers than you lose just by being visible in the street. So, their round will probably increase anyway; keeping the rental payment constant is no real hardship.
Then you're looking at a huge payback despite buying the work at 10x monthly value.
Buy it at 3x monthly (which is the value some berks put on their rounds) and you're in the realms of 80% ROI annually. Madness.
Vin
Vin