Valueing a firewood business

[gensetsteve]

No starting up in the next 12 months and never within a 20 mile radius would give me a bit more confidence.

[Billy68]

i think a clause saying they can never opperate again within 20 miles would be struck out of the draft agreement by most solicitors and replaced with somthing more sensible like 5 years

 

we just sold a business last year and also very nearly bought another, so do have some experience of this

 

i would also add in repsonse to the previous post about a sole trader business that just generates an income being worthless - this is not the case. the only issue is if the clients were buying into the skills / personality of the individual, in which case it is a bit harder and would require a longer hand over period to make it work for the buyer.

[Stereo]

I'm not saying it's worthless, just that most people vastly over-estimate the worth of their businesses. I also have experience, having run many businesses over the last 20 years.

 

Yes, a yard full of wood, a customer base and a lease in place has some worth, just not as much as many people think. The irony with business valuations is that the multiples increase as the business grows. eg. a business which nets one man £25k a year is worth probably only it's assets at maybe 80% value plus some goodwill. A business which nets a £500k profit may be worth many multiples of that amount.

 

I would not assume that you can talk about multiples of anything for a one man band. You can certainly talk about the value of a customer list, a lease of a good property, a mailing list or whatever but that's about it.

 

I'm not trying to be a killjoy it's just that the mythical £20k value that most people put on any old business is just that. A myth.