We help people sell their businesses for many reasons; moving, downsizing, another opportunity, divorce, but much of the time it is for retirement. What ever your reason is for selling your heating and air conditioning company, you should begin with the end in mind.
When I meet with a seller, one of the first few questions I ask, is what does the check need to say for you to walk away? That usually causes a moment of silence, and for many, they come up with some multiple they heard from a friend, or something they read in a magazine. While it is good to have a benchmark, and as I have mentioned before we use them in establishing our price, you need to know for you, how big the check needs to be for you to say you are done with this chapter in your life, and it is time for someone else to take it over.
I realize that for many of you there are days when someone could have it for free, if you could just walk away, but when it is time to sell, you need to be compensated for what you have sacrificed and built.
Please keep in mind that there are many ways to value a business, but the most important needs to be what you can put in your pocket after it is done, and is that enough for you?
One of the first places to start with adding up items, is what does the business currently pay for that you will now need to pay out of your pocket? Cell phone, insurance, gas, vehicles, lunch and dinner, etc.. I would suggest looking at your bank statements for a few months, and see what are things that the business currently pays for that you will now need to either eliminate or become responsible for.
The next step should be, what do you plan on doing once the business is sold? Travel, move to a new town, or work on a hobby? Each of these things cost money, and now you will not have a business paying for them. You will also not be tied up working all day, and hopefully have the time, and money, to do the things you enjoy. Unfortunately I get calls from potential buyers who sold their businesses in the past, and did not budget enough money moving forward and now they are looking to buy a business to supplement their income.
The more planning you do prior to the sale, the more prepared you will be. I am happy to help you confidentially take a look at what your business is currently worth, and whether or not that will meet your needs, and what can be done to change that, just give me a call or send me a note.