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Selling a business

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3 hours ago, jose said:

I dont get it, if you have a business that has shown consistent profit year on year there has to be a value to that.

To say without contracts its not really worth anything surely is wrong. People dont have a contract with tesco's but year in year out they make massive profits and if you wanted to take over that you know you would be paying for it! Yes they have bigger assets but thats all proportional to the point.

Not one of the actual paying customers that walk through that door have to use them but instead choose to. Same as with all the repeat customers that the OP will have gained over the years but doesnt have a contract.

 

Obviously the OP needs to shown a potential buyer the books to prove the numbers.

I started from scratch and i know for sure it would have been a lot easier to take on a established business ( as long as its not a run down failing company). 

If i bought an established company with proven profit each year id have jumped a good few years of establishing a reputation while making ends meet, i probably wouldnt feel like a 90 yr old in a 40 yr old body!

Go buy it then

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3 hours ago, jose said:

I dont get it, if you have a business that has shown consistent profit year on year there has to be a value to that.

To say without contracts its not really worth anything surely is wrong. People dont have a contract with tesco's but year in year out they make massive profits and if you wanted to take over that you know you would be paying for it! Yes they have bigger assets but thats all proportional to the point.

Not one of the actual paying customers that walk through that door have to use them but instead choose to. Same as with all the repeat customers that the OP will have gained over the years but doesnt have a contract.

 

Obviously the OP needs to shown a potential buyer the books to prove the numbers.

I started from scratch and i know for sure it would have been a lot easier to take on a established business ( as long as its not a run down failing company). 

If i bought an established company with proven profit each year id have jumped a good few years of establishing a reputation while making ends meet, i probably wouldnt feel like a 90 yr old in a 40 yr old body!

Also a Tesco contract has got to be a big alarm bell to anyone! You don’t get big and rich by being nice to your suppliers 

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Tesco’s have shops on every corner, and a marketing budget others can only dream of to get shoppers through the door. They also sell things that everyone in Britain needs every single week of your life. The two are not comparable. 
 

As others have said, if the business stops trading, competitors get a bite of the market share for free. Even if someone buys the ‘goodwill’, then a decent percentage of customers will probably still switch to using another company. So therefore the ‘goodwill’ value is low or non existent. 

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People come to a small company because they like the person that comes out and quotes, said person is normally on site when the works are done. When that person changes a existing customer may not like them and wonders off to another contractor that they feel more comfortable with.

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8 hours ago, Richard 1234 said:

Go buy it then

As said i already have my own business thanks

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7 hours ago, doobin said:

Tesco’s have shops on every corner, and a marketing budget others can only dream of to get shoppers through the door. They also sell things that everyone in Britain needs every single week of your life. The two are not comparable. 
 

As others have said, if the business stops trading, competitors get a bite of the market share for free. Even if someone buys the ‘goodwill’, then a decent percentage of customers will probably still switch to using another company. So therefore the ‘goodwill’ value is low or non existent. 

As others have said, if the business stops trading, competitors get a bite of the market share for free. Even if someone buys the ‘goodwill’, then a decent percentage of customers will probably still switch to using another company. So therefore the ‘goodwill’ value is low or non existent. 

 

exactly the same for any business then surely? 

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48 minutes ago, Will C said:

People come to a small company because they like the person that comes out and quotes, said person is normally on site when the works are done. When that person changes a existing customer may not like them and wonders off to another contractor that they feel more comfortable with.

My thoughts exactly business is about personality! ( certainly small businesses anyway a bit different if you are a hedge fund manager throwing 6 or 7 billion at a Morrisons takeover or a football club although I still think personality counts even at this level )when you turn up or have existing customers that know you it is they that are buying into you setting aside the fact that you are 100% professional and 100% reliable thrown into the mix

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2 hours ago, jose said:

As others have said, if the business stops trading, competitors get a bite of the market share for free. Even if someone buys the ‘goodwill’, then a decent percentage of customers will probably still switch to using another company. So therefore the ‘goodwill’ value is low or non existent. 

 

exactly the same for any business then surely? 

Pretty much. ‘Goodwill’ is a term used by small business owners to try to convince others and themselves that their business is worth more than just the tools despite the absence of long term contracts and management who run the business. 

Edited by doobin
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2 hours ago, doobin said:

Pretty much. ‘Goodwill’ is a term used by small business owners to try to convince others and themselves that their business is worth more than just the tools despite the absence of long term contracts and management who run the business. 

“Goodwill” is generally a phone number, many previous clients will ring that number when they want work doing, they will pass that number onto friends etc, the number is probably also advertised in various place.

 If you buy the number you should get plenty of enquiries, the difficulty maybe converting the calls into work, but if the person they were going to use is no longer trading and it you who tells the client that, you do have a head start on the competition.

 

 It’s important when buying “Goodwill” that the seller entered into a contracted period of none trading for say 5 years.

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5 hours ago, jose said:

Even if someone buys the ‘goodwill’, then a decent percentage of customers will probably still switch to using another company.

Which is why pubs and small shops never say that they will be moving on, first you know is when you see new people behind the bar or counter.

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