Selling my business with no mention of price!

cormie

Hey folks,
I'm sure some of you have seen me post here before with me considering selling my business, www.VanTasks.ie. The attached is the result after doing up a sales proposal and consulting with some people with experience in the area.

I've chosen not to mention what price I'd be happy to accept based on advice received and never to even hint at it until someone offers a price I'm happy with and doesn't look like they are going to improve on it, and that it doesn't look like I'll be getting better offers.

A few people I've spoken to have said straight away that they wouldn't have the finance to be able to buy it, so I'm curious what kind of price people think I'd be happy with based on the attached?

CIARAN_BOYLE

cormie wrote: »

Hey folks,
I'm sure some of you have seen me post here before with me considering selling my business, www.VanTasks.ie. The attached is the result after doing up a sales proposal and consulting with some people with experience in the area.

I've chosen not to mention what price I'd be happy to accept based on advice received and never to even hint at it until someone offers a price I'm happy with and doesn't look like they are going to improve on it, and that it doesn't look like I'll be getting better offers.

A few people I've spoken to have said straight away that they wouldn't have the finance to be able to buy it, so I'm curious what kind of price people think I'd be happy with based on the attached?

Here is my thoughts and comments.

There is no ongoing operations unit. There will be no continuity so whoever is coming in has to be hands on. No opportunity to for a passive investor.

Your name is all over the place(social media presence) which means the reputation of the business is tied up in you, it may not transfer well.

You have 5 vehicles but no staff. If someone doesn't have the same knowledge of contractors they won't be able to keep the business sourced with labour unless the hire full time staff which is a big risk that you never took.

You have an ageing fleet that has to be expensive for insurance and if the business is continue the fleet may need renewal in the next few years.

So the need for finance isn't the need to buy your business it's to refresh the fleet and hire full time staff.

Buttercake

no mention of financial or revenue, cost of sales, staff/contractors etc to date

is it a limited company or a registered business name?

from reading the document = €0

cormie

Hi Ciaran, thanks for your mail.

You're right, this is why I think the ideal buyer would be somebody already in the industry who has experienced staff, and they would simply use VanTasks as a sister company with a well built brand and reputation.

Hi cormie, i enjoyed your presentation. I'm unsure if it is a good idea to look for valuations on boards though. What if there is a potential buyer here, or by doing some homework they come across this post on boards via google.

I assume money should be spent getting a real valuation to put your head in the right space

I certainly wouldn't want my lot evaluated publicly like this

banie01

Buttercake wrote: »

no mention of financial or revenue, cost of sales, staff/contractors etc to date

Was just about to post similar. Without at least a ballpark overview of the turnover and earnings it's basically just a sell off of aging assets, along with the websites and your contact lists.
Granted the financials should not be broadcast and of course be subject to an NDA, but based on the document I'd be basing any valuation on actual financial performance rather than the collection of assets many of which will soon need replacing and carry significant cost risk given their age.

CIARAN_BOYLE

cormie wrote: »

Hi Ciaran, thanks for your mail.

You're right, this is why I think the ideal buyer would be somebody already in the industry who has experienced staff, and they would simply use VanTasks as a sister company with a well built brand and reputation.

Do you have any sources of reoccurring work?

IE people who use you for regular movements. If so advertise them give them a page in your pitch. They would be your best option for achieving value.

Not an expert in the field but I'm going to put a value on your business as is at 13k. 6k for the Web presence and reputation (more for a structured handover) and 7k for the aging fleet. If you have reoccurring business you can probadly treble the annual value of that (based on retention over 2-3 years) in addition to the above valuation.

If wanted I could give you contact details for a mergers and acquisitions team where I work. They would meet you take your business details and look at other businesses in your sector who have approached them looking to find someone to buy.

PARlance

CIARAN_BOYLE wrote: »

Here is my thoughts and comments.

There is no ongoing operations unit. There will be no continuity so whoever is coming in has to be hands on. No opportunity to for a passive investor.

Your name is all over the place(social media presence) which means the reputation of the business is tied up in you, it may not transfer well.

You have 5 vehicles but no staff. If someone doesn't have the same knowledge of contractors they won't be able to keep the business sourced with labour unless the hire full time staff which is a big risk that you never took.

You have an ageing fleet that has to be expensive for insurance and if the business is continue the fleet may need renewal in the next few years.

So the need for finance isn't the need to buy your business it's to refresh the fleet and hire full time staff.

Similar thoughts to above.

The IM focuses a lot on you organic web traffic, multiplying it by the ad word cost... that doesn't really wash with me. At €5.25 it just goes to show how competitive the space is. The site didn't appear on the first couple of pages on my searches.

The biggest value I see in the company is the reputation that you've built up. It seems excellent, congrats.

5 old vehicles and no staff just ='s a lot of associated costs for me.

I think your buyers market is fairly limited, a one man show who has just is contemplating moving towards the next step is probably your buyer.

If I was that buyer I would offer somewhere in the region of €30-40k.

That would be broken down into €7.5k for the vehicles (with the intention of selling 3-4 of them straight away, deducting 2k from the NBV to remove signage).
2.5k for the website, fairly generous, I could copy it for less.
€15k on the basis that you worked alongside me for 3 months, doing a handover, introductions to repeat customers / current contractors etc and it would paid in stages. That brings it to 25k, the other €5-15k would be for goodwill and customer base.

Your ideal buyer may be able to get a 20-30k loan and with a bit of savings on top, it could be a runner.

Edit: I don't really need financials for that initial valuation but they would be ideal. The only thing that would change is the goodwill. I've assumed there are no liabilities associated, if there was, they would come of the price.

PARlance

Get the 2 guys that voted 150-300k into a room and start a bidding war would be my advice

cormie

Thanks again.

Yep, I know posting on boards is of course met with valuations like 0 :pac: but thought I'd post it anyway.

This is by no means a typical business sale, I have infact gone about selling it completely arseways, typical selling techniques would have the business push itself for 1 or 2 years before selling so the accounts are in the best shape ever. I've done the complete opposite.

The thing is, if I was to actually work at it solid for 3 months, I could make more than what you're proposing someone would offer me, and I'd still have the business and the vans after it:)

Also, I think the 7.5k valuation on the vehicles is far south of what they are worth and then there's all the equipment and that too.

It's interesting to see the opinions nonetheless.

Conservative

How very odd! I have literally just finished reading your 3 yo post about needing a double and was wondering why you had decided against selling the business (also read recent laptop debacle last week - coincidence).

I know the much missed Pedronomix was a big fan after meeting you and your online reviews are exceptional.

I see your vans around Dun Laoghaire all the time and just wanted to wish you the best of luck with whatever you turn your hand to next.

(Off topic)

PARlance

cormie wrote: »

Thanks again.

Yep, I know posting on boards is of course met with valuations like 0 :pac: but thought I'd post it anyway.

This is by no means a typical business sale, I have infact gone about selling it completely arseways, typical selling techniques would have the business push itself for 1 or 2 years before selling so the accounts are in the best shape ever. I've done the complete opposite.

The thing is, if I was to actually work at it solid for 3 months, I could make more than what you're proposing someone would offer me, and I'd still have the business and the vans after it:)

Also, I think the 7.5k valuation on the vehicles is far south of what they are worth and then there's all the equipment and that too.

It's interesting to see the opinions nonetheless.

My bad, thought they were listed as a NBV of €9,700, no? Didn't factor in the equipment.

When you say you would "make" far than 30-40k over a 3 months period... do you mean net profit? Or just revenue/ turnover?

cormie

Conservative wrote: »

I know the much missed Pedronomix was a big fan after meeting you and your online reviews are exceptional.

I see your vans around Dun Laoghaire all the time and just wanted to wish you the best of luck with whatever you turn your hand to next.

(Off topic)

Thanks a lot for that



PARlance, the vans are not included in the equipment value of €9,700, that's the equipment alone, not the vehicles

Also, I said that in response to you saying someone would pay me 15K to work alongside them for 3 months

CIARAN_BOYLE

cormie wrote: »

Also, I think the 7.5k valuation on the vehicles is far south of what they are worth and then there's all the equipment and that too.

It's interesting to see the opinions nonetheless.

The vehicles are at a life stage where insurance is incredibly expensive. Probably close to 15k for the 5? You tell me. I'm sure they are good condition but insurance is likely to go crazy seeing the age. That will probably increase by 3-5k a year if they stay operating. That makes the worth very little.

Your business would be a lot more attractive as an ongoing limited company with several staff members.

Casual staff and contracting arrangements is a big flag saying I don't trust that I have the client based to support full activity. The staff would also increase likelihood of retention of regular customers.

PARlance

cormie wrote: »

Thanks a lot for that



PARlance, the vans are not included in the equipment value of €9,700, that's the equipment alone, not the vehicles

Also, I said that in response to you saying someone would pay me 15K to work alongside them for 3 months

Ah ok, well I would only pay the value of the vans less the costs that might be needed to sell them (to "Unbrand" them). They're an old fleet and I'd want to offload them for reasons Ciaran has mentioned.

The 3 months work, would be a "handover". It shouldn't take more than a full day per week. So the 15k would be good money for that imo.

Sorry if it's harsh but I can only see real value in the knowledge you have, your reputation, and repeat customers (and there's no guarantee they will repeat). Everything else can be copied easily and that is clearly seen by the amount of people there are out doing the same thing.

Digital_Guy

I think anyone with the drive to set up a van or logistics type operation will naturally only want to do it for themselves, so I can't see you getting the type of person you'd like to take it over - they'll be all about building their own empire under their own brand / name.

However, if I were that guy I'd be saying 'why thank you very much' to being handed on a plate all that market research and great data on how I'd expect my own business to perform! Prospective clients and all...I'd take that down stat.

Why not just sell off all the assets and just keep VanTasks.ie as a lead generator site - take a commission on each referral or charge other van operators a small fee to feature on the site? I remember saying the same thing 4 years ago

Bandara

What I don't really get is why sell it ?

I presume it makes you good money year on year, i.e. it doesn't just give you a wage ?

You are never going to realise anything like the value that the income it gives you would suggest that you should get for the business. Some businesses just don't sell well.

Why don't you keep it, step back from it, hire and incentivise someone suitable to run it for you, with you only investing small hours a week into it. At your stage of running the business there really is no requirement for you to do anything other than manage/deal with issues as they arise, both of which you can do remotely.

Just my 2 cents !

Digital_Guy

Bandara wrote: »

What I don't really get is why sell it ?

I presume it makes you good money year on year, i.e. it doesn't just give you a wage ?

You are never going to realise anything like the value that the income it gives you would suggest that you should get for the business. Some businesses just don't sell well.

Why don't you keep it, step back from it, hire and incentivise someone suitable to run it for you, with you only investing small hours a week into it. At your stage of running the business there really is no requirement for you to do anything other than manage/deal with issues as they arise, both of which you can do remotely.

Just my 2 cents !

Exactly. It's either use the site traffic to refer leads / jobs to others, or keep at it yourself.

I think you have to realise you don't have anything to sell here, some businesses don't work that way and ultimately this is a job you created for yourself. You can't sell brilliant customer service.

Dades

Deleted User wrote: »

I'm unsure if it is a good idea to look for valuations on boards though. What if there is a potential buyer here, or by doing some homework they come across this post on boards via google.

I have to agree with this. I'd be asking if the mods could delete the thread, or even just remove any mention of the company name from the thread to stop it popping up in Google.

SeanSouth

As someone who is involved in the sale and valuation of businesses on a day to day basis, I would venture an opinion that your business has almost no value apart from the liquidation value of the vehicles

A service business like yours derives value from :

a) Water tight repeat contracts
b) Unique skills of personnel transferring
c) Unique value proposition
d) Scale

On the face of it, your business scores extremely low on all counts. The barriers to entry are very low and everyone knows its a cut throat business. Anyone wanting to enter a business like this is likely to start from scratch.

Sorry for any disappointment.

_Brian

I think your looking to meet someone with a redundancy payment in their pocket and looking to jump into a one man business rather than back into the regular 9-5
Posters above have given a great summary of both positives and negatives so I'll not repeat them.

The big danger is that the business is built about you and your personality, it's not really a separate entity that can be sold on and stand on its own two feet. The big risk is that customers don't "click" with the new owner and start to drift off as they were used to dealing with you as the business.

I also think broadcasting the sale on boards is a mistake, if I were interested I'd be googling the hell of the business and boards.ie stuff always comes up and I always refer to it.
Best of luck.

I do wonder if the business was suitable to be ran by another person would you not hire someone to run it and you could move on to a new enterprise?? That would worry me as a prospective new owner.

cormie

CIARAN_BOYLE wrote: »

The vehicles are at a life stage where insurance is incredibly expensive. Probably close to 15k for the 5? You tell me. I'm sure they are good condition but insurance is likely to go crazy seeing the age. That will probably increase by 3-5k a year if they stay operating. That makes the worth very little.

Your business would be a lot more attractive as an ongoing limited company with several staff members.

Casual staff and contracting arrangements is a big flag saying I don't trust that I have the client based to support full activity. The staff would also increase likelihood of retention of regular customers.

All the vans are the same price on he policy regardless of age. The age has never dictated the price in the 6+ years on the policy for this line of work.

You're right about the several staff members being more attractive, but not about any flag that I don't trust I have the client base. I simply never wanted to go down the route of becoming an employer and just to keep running it as a lifestyle business to suit myself.

PARlance wrote: »

Ah ok, well I would only pay the value of the vans less the costs that might be needed to sell them (to "Unbrand" them). They're an old fleet and I'd want to offload them for reasons Ciaran has mentioned.

The 3 months work, would be a "handover". It shouldn't take more than a full day per week. So the 15k would be good money for that imo.

Sorry if it's harsh but I can only see real value in the knowledge you have, your reputation, and repeat customers (and there's no guarantee they will repeat). Everything else can be copied easily and that is clearly seen by the amount of people there are out doing the same thing.

Unbranding would probably be done in an 8 hour day. I've done it before and it's pretty quick once you have the right stuff. There's really not that much vinyl on it, only two colours, the rest uses the white space of the van.

Yep, there's loads of competition out there, but I've kinda set myself away from the cut throat end of it, there's customers who want to pay €15 to move a sofa and €50 to move house, then there's customers who want someone to come in and pack their most private possessions and pay thousands for it, I'm an intermediate, a quality, trustworthy and proven service and people have said they want to use VanTasks no matter what the price after what they've read about the service.

Bandara wrote: »

What I don't really get is why sell it ?

I presume it makes you good money year on year, i.e. it doesn't just give you a wage ?

You are never going to realise anything like the value that the income it gives you would suggest that you should get for the business. Some businesses just don't sell well.

Why don't you keep it, step back from it, hire and incentivise someone suitable to run it for you, with you only investing small hours a week into it. At your stage of running the business there really is no requirement for you to do anything other than manage/deal with issues as they arise, both of which you can do remotely.

Just my 2 cents !

Just fancy a change, want to try different things. I've been doing it 10 years, that's more than 10% of my life. It's a terrible financial decision to sell it I know. I could easily make a comfortable living off doing it for the rest of my years, but I simply don't want to do the same thing for this long and I've other passions etc I'd like to explore. Plus I'd like to just go away for 3 months minimum and have absolutely no responsibilities! I've never really been able to do that and I long for it.

Getting someone in to run it would also make a lot more sense, but again, a clean break from it is really tempting.

Digital_Guy wrote: »

I think anyone with the drive to set up a van or logistics type operation will naturally only want to do it for themselves, so I can't see you getting the type of person you'd like to take it over - they'll be all about building their own empire under their own brand / name.

However, if I were that guy I'd be saying 'why thank you very much' to being handed on a plate all that market research and great data on how I'd expect my own business to perform! Prospective clients and all...I'd take that down stat.

Why not just sell off all the assets and just keep VanTasks.ie as a lead generator site - take a commission on each referral or charge other van operators a small fee to feature on the site? I remember saying the same thing 4 years ago

There's plenty of people doing the same thing already and will be plenty more getting into the same line of business in the future too. Why not get a head start and take over a well established and reputable business with a customer base already? The amount of time that's gone into setting it up as good as I can to be ready for the work could all be avoided too.

setting it as a lead generator site is an interesting idea though

Digital_Guy wrote: »

Exactly. It's either use the site traffic to refer leads / jobs to others, or keep at it yourself.

I think you have to realise you don't have anything to sell here, some businesses don't work that way and ultimately this is a job you created for yourself. You can't sell brilliant customer service.

I have to disagree, it's a ready to go business with a flow of customers and good ability to secure valuable jobs and customers. I haven't spent money on advertising in about 7 or 8 years other than running the odd facebook competition, but I'd hardly call that advertising.

I think it would be of great value to someone already in the business, if they were to run it as a sister company along with their current set up, both businesses could be of great benefit to eachother.

Dades wrote: »

I have to agree with this. I'd be asking if the mods could delete the thread, or even just remove any mention of the company name from the thread to stop it popping up in Google.

I don't really have anything to hide though. It's clear it's a lifestyle business and that I've run it to sit in line with my own personal life. Anyone serious about it would hopefully see beyond this.

SeanSouth wrote: »

On the face of it, your business scores extremely low on all counts. The barriers to entry are very low and everyone knows its a cut throat business. Anyone wanting to enter a business like this is likely to start from scratch.

Sorry for any disappointment.

Same as what I've said above. I've been in contact with you before and do appreciate your input, but I can't agree that it's worth nothing other than the asset value.

_Brian wrote: »

I think your looking to meet someone with a redundancy payment in their pocket and looking to jump into a one man business rather than back into the regular 9-5
Posters above have given a great summary of both positives and negatives so I'll not repeat them.

The big danger is that the business is built about you and your personality, it's not really a separate entity that can be sold on and stand on its own two feet. The big risk is that customers don't "click" with the new owner and start to drift off as they were used to dealing with you as the business. .

I think it would be far better suited to an already established firm who are looking to increase sales and have men and systems in place to take on the extra jobs.

I know of course I've been the one who has built the business and many of the reviews and that mention my name, at the same time however, any time I tell somebody it's just me, they are shocked and believe it to be a much bigger business






Just to note, I had a 1 hour call from somebody today who saw this thread and is in a similar business already. They saw all the negative comments above and weren't really phased by them and are interested. Meeting them on Monday for another chat.

Atlantic Dawn

Would need to know the profits, I would typically go with 10 times the annual profit plus the value of the vehicles and equipment.

CIARAN_BOYLE

cormie wrote: »

You're right about the several staff members being more attractive, but not about any flag that I don't trust I have the client base. I simply never wanted to go down the route of becoming an employer and just to keep running it as a lifestyle business to suit myself.

It's a flag to a buyer. Doesn't have to be true or not. It's a message that's being put out.

StupidLikeAFox

cormie wrote: »

All the vans are the same price on he policy regardless of age. The age has never dictated the price in the 6+ years on the policy for this line of work

You did have a thread complaining about a huge insurance jump recently though....

cormie

StupidLikeAFox wrote: »

You did have a thread complaining about a huge insurance jump recently though....

Yup, nothing to do with the age of the vehicles though, all down to the occupation/usage.

cormie

Is the turnover not detailed in that pdf? I couldn't find it.
Company is worth close to sfa IMO, the fleet is the only value unless the repeat business can be quantified annually.

cormie wrote: »

..........

Yep, there's loads of competition out there, but I've kinda set myself away from the cut throat end of it, there's customers who want to pay €15 to move a sofa and €50 to move house, then there's customers who want someone to come in and pack their most private possessions and pay thousands for it, I'm an intermediate, a quality, trustworthy and proven service and people have said they want to use VanTasks no matter what the price after what they've read about the service..............

Without you it's just an aging fleet