I was just recalling the recent WCT article about valuing a business. I started thinking about the guys on this board looking to break into ACD work. Anyone out there thinking about getting out? This might be a good place to get some interest in your business.

I'd sell right now.....for the right price!

Me too; but I wouldn't be able to enjoy the proceeds for very long; my son would kill me!

Just sell your share!

I'm always open to the concept based on the deal I'm being offered.

Dave,

That's a great post.

Just think, a turnkey operation with equipment, vehicles, trained technicians, customer base, referring partners and advertising already in place. You just have to have to keep it going!

I've thought about possibly doing that and teaching/mentoring the new owner for several months until things ran smoothly.
Of course you can't learn this biz in that short amount of time but if you have great people working for you it sure helps.

It definitely takes a solid year to experience all the seasons.

Your business will not be worth as much as you expect...... b John Constalinie (sp) who had been in business since the 80's in Seattle did not get NEAR what I would have thought it was worth,,,....

Is there a formula for selling a ADC business like two times gross business per year or X times cash flow?

I have heard more than once the generic formula is the last 3 years average gross, and I think there is an equipment/vehicle depreciation variable as well. I know this has been the case around here twice. that doesnt mean that all adc bus will sell for that price as with any bus. acquisition ther are many variables; outstanding debt, potential for gowth etc.

As discussed in the May/June 2012 WCT Magazine In The Spotlight article, there are 4 common evaluation methods: sales, assets, cash flow, and market valuation.

Regardless of what method is used the biggest issue is with the buyer being able to finance the purchase. Unlike a PCO firm that has a constant recurring revenue from contracts the majority of WCO firms are always looking for new customers to replace the finished projects. That gives more of an unsecured debt scenario for lenders especially when major assets are not included such as land and buildings.

This is one of the reasons why firms that are trying to acquire companies are only looking for recurring commercial contracts and valuing the offer on that information. Due to the lack of financing available, a good number of sales are owner financed which has the owner accepting a lower than desired amount distributed over a 5 - 20 year timeframe.

x2 I held a real estate license in Florida and sold a few business'. Much of what Eric wrote is very real world and much of that I also discussed on July 25, 2010.

What Is My Business Worth? 7/25/2010

Many times in the business the question of selling one's business or what a business may be worth. We will spend about 30 minutes and discussed some principles of nuisance wildlife control business appraisal.

http://animalremovals.net/what-is-my-wildlife-control-business-worth/



I just remembered I have a podcast about that at least related to this topic. This was the first time I interviewed Dave Schmidt CWCP of St Louis MO who also posts here and has done several podcasts with me since.

Duane "Dew" Haske, Reginald Murray were also part of the podcast.

I also gave a class on how to use spell check on trapperman " Pesky " !!

Dave caught St Louis's first armadillo yesterday. Congrats Dave !!

I'd be gone in a heartbeat if I could get that!!!

Robb,

What is duane haskes' handle on t-man?

Dew !! http://www.trapperman.com/forum/ubbthreads.php/users/6405/dew

Like Vinke said, I have not heard of a Wildlife business selling for anywhere close to what it was worth. Now you take a Wildlife business that has an equal or greater amount of pest control involved and suddenly you've got half a dozen Orkins looking at your customer list. ( And probably recognizing all of them as stolen customers ) Now your company is worth more for the pest control potential. ( Since your customers quit them in the first place, what makes them think they won't quit them again? )

Paul, when selling a pest control business, it is often setup to pay depending on how many are still there after one year. The value of the company is often only that amount. How much they actually make after one year. A company may gross $100,000 a year. After the sale it could drop to $85,000. There is no clause if it goes up. That is my understanding from what I have read about PCO's selling. O(swear word) may not reduce the price if business drops, but that is how small guy's buy other small guy's.
I was actually refered by O(swear word) when one of their tech's made a customer so mad they cancelled service. Regional management reccommended me or another company to take over the service. We had both worked there and they new our work. O(swear word) has good people. They even have good branches. The branch I worked at was good. Then there was some changes in management. Those managers are gone and so is the Branch.

For what it is worth, here is an opinion. There is a difference between being self employed and being a business owner. The value of a business will be greater for a investor that is not required to work in the business (just on the business). Perhaps, this is another reason why ADC businesses do not sell for the value that owners believe it is worth. Your buying cashflow, goodwill, some trucks, and a bunch of traps with raccoon poo. The value is the cashflow and goodwill.

Well said Dave.

The self-employed tradesman owns a business but not one that can readily be sold because *he* is the business. The rest is just a pile of used tools.

Out of the list of assets that John Pearson listed, the only things valuable enough to be important to a businessman are the trained techs and you can't really sell them. They're free to leave at any time.

How could I forget the people! There is value...assuming a good chance of retention.