• PRO

        It is a bit of university stuff yes! Simplistic yes, but it is fact and a good way of viewing it in the first instance. I'd argue that it has meaning to any trade, hence the need to be simplistic to cover all bases. 

        • PRO
          Maybe. It’s also a fact that your business or Gary’s or Andrews (just as examples) would be worth precisely zero to me as they are too far away.
          It’s not as simple as well meaning texts can make things out to be.
  • If you buying an established business, the rule of thumb is that it is worth what last years accounts net profit was, plus the current value of machinery.

    If the business has a £75000 turnover the net profit is probably around £15,000. So offer less than this figure.

    • PRO

       Did you sell your previous businesses, ie is this from real life scenarios ?

      • PRO
        Why is that relevant? It’s no more a right or wrong post as other on this thread have been.
        • PRO
          ??? Is that for me - about my question to Adrian, Richard ?
          • PRO
            Yes just wondering:)
            From my point of view I think that unless you are buying cast iron contracts then you are buying some used tools so that should be the price certainly on a small scale purchase.
            I’ve also heard 3 times profit plus tools.
            And no I’ve not bought or sold as I don’t see it working on the scale I could afford or even want to buy at.
            • PRO
              Are you are looking at the wrong response :confused:

              I was asking Adrian if his comment was from his experience of his multiple businesses - it’s indented under his comment ....
  • PRO

    There are so many possible data points for business valuations. This £15k is one possible. There are many others, some to do with profit multiliers. Lots depends on what systems and contracts are in place; ie what expertise and value is remaining.

    Jack postulated a very valid one as an alternative; ie what would the marketing costs be to gain 35 customers and/or £75k of customer revenues.

    A good marketing campaign will get 35 customer for a lot less than £15k! I'd get around 300 for that spend, and significantly more than £75k revenue.

    So a "valuation" / selling price is very personal or specific to the buyer and seller, so beware figures being bandied around without proper context.

    • Not sure you can compare the two. £75k of existing customers are more reliable and worth far more than £75k of newly generated work. 

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