[kwakakid355]

Hi all !
 Am presently looking for a career change, and am tentatively looking in to buying an established contract cleaning business in my area.
 The business has yet to be valued, but the equipment, stock, vehicle,etc has been estimated to be around the 15k mark.
 The turnover last year was apparently around 70k, books not seen yet. Any ideas on how to value the rest of the business ? Goodwill, etc ?

Stu

[pristineclean]

Personally, I'd look at the length of time the company has been trading, how long the the customers have been with the company and what contractual agreements (if any) are in place to ensure short term stability.

One point that interested me, and on which I'd appreciate opinions, is the value of the stock and equipment in relation to the turnover. If stock, vehicles etc have a (depreciating) value which represents about 20% of turnover, it suggests that there's either been a spending spree somewhere along the line, or that business has fallen away leaving a stock excess.  On the other hand, I could be completely wrong and there might be a valid reason as to why this figure is so high..

Callum

[kwakakid355]

Thanks Callum,
 am at early stages at the moment but from what i gather i believe the former is true. The vehicle being an x-reg Merc Sprinter and equiped with truckmount Spitfire 4.0 and    rx20. Or would you put a different value on said items ?
 Stu

[Ian Gourlay]

Take a look at the weekly monthly value of ongoing contracts not one off jobs

[Tim Downer]

Ok, so the value of the van etc is at £15,000. That gives you £55,000 left. After supplying these contracts with staff and supplies, how much do you make as profit? Weight this against the cost of purchaing the business and see if it is worth it

[kwakakid355]

Thanks for your replies !
 As i said i am at a very early stage in proceedings, but understand that this is mainly a one man operation with occassional help.
 In your experience, have you found that clients tend to stay or shop around when businesses have a change of owner/operator ?

[Musicman]

kwakakid355 can I suggest that you re-post this on the Carpet Cleaners section as the equipment is clearly for this rather than contract cleaning.

In my opinion goodwill in that line of business is practically worthless as it will probably be one-off work rather than a lot of repeat business.

While customers may be loyal to a particular operator (and I don't think there is that much loyalty in the domestic market) once that person has moved on the loyalty disappears.

As Ian suggests you need to take a look at the value of any contract work.

Take a look at the FAQ section about starting up a business.