Selling your business (with no storefront) - Thoughts?

[LordX]

So, I have been pondering if selling my business makes any sense (vs just going out of business).

I have no store front (I specialize in housecalls) - however, there is the cache of loyal customers and google rankings/reviews that have been earned over 15+ years. I don't know if that is worth anything to a potential buyer or not.

Thoughts?

 

[britechguy]

Keep in mind that if you have always been "a one man show" that your business and you are indistinguishable to your loyal customer base.

I say this only because some do not consider that if a sale were to be made to someone who turns out, after the sale, to be "suboptimal" it is virtually certain that your reputation (personal and business, even if you're no longer in business) can end up being tarnished.

You must vet, very carefully, anyone to whom you might consider passing the baton, even if they're paying for the privilege.

For myself, and only myself, that's why I would never even consider selling my business. As far as my customers are concerned I am "my business" and that's because, in reality, I am. When I'm ready to stop, it's done.

 

[YeOldeStonecat]

Buyers often want to see "contracts"...which gives predictable income for a predictable time period.

 

[britechguy]

Buyers often want to see "contracts"...which gives predictable income for a predictable time period.

Not that I don't understand exactly what you're saying, but would that kind of buyer even give what seems to be a break-fix business a second look?

Those of us in that sector don't have contracts. We're on-demand, on-need service providers. We don't need no steeenkin' contracts! (Or at least not of the type you are describing, which are very MSP-ish).

 

[LordX]

Not that I don't understand exactly what you're saying, but would that kind of buyer even give what seems to be a break-fix business a second look?

Those of us in that sector don't have contracts. We're on-demand, on-need service providers. We don't need no steeenkin' contracts! (Or at least not of the type you are describing, which are very MSP-ish).

Interestingly, I do have a contract with Pitney Bowes for my service area. However, I do not think PB would simply allow me to transfer ownership of it to someone else.

 

[YeOldeStonecat]

Not that I don't understand exactly what you're saying, but would that kind of buyer even give what seems to be a break-fix business a second look?

Those of us in that sector don't have contracts. We're on-demand, on-need service providers. We don't need no steeenkin' contracts! (Or at least not of the type you are describing, which are very MSP-ish).

I'm not sure. Perhaps the "name/phone number/domain" have a little value. But going back to what you said above in your first reply, and I agree with 1000%, the clients usually have a relationship with the "person, the tech".
I agree...break fix/residential pretty much doesn't deal with contracts. Contracts are in the "biz to biz/MSP realm". Although where I am, we've been "handshake/word of mouth" old school guys for most of our 30 years, so our business didn't have much "value" to a potential buyer. We've had excellent client retention, each of us here has developed long lasting relationships with our customers. Only about 2 years ago have we started getting serious about getting contracts signed. Gives the business real value.

 

[britechguy]

@YeOldeStonecat

As soon as a business goes beyond 2 people, and you could argue beyond one person, then looking at its possible sale value becomes important. I guess for some, even if it were their own one man or one woman show, they might go that route.

I am one of those dinosaurs who simply cares too much about how my clients feel about me, and I them, to ever think of myself as something that's separate from "my business." You can't have "my business" without me.

 

[YeOldeStonecat]

@YeOldeStonecat

As soon as a business goes beyond 2 people, and you could argue beyond one person, then looking at its possible sale value becomes important. I guess for some, even if it were their own one man or one woman show, they might go that route.

I am one of those dinosaurs who simply cares too much about how my clients feel about me, and I them, to ever think of myself as something that's separate from "my business." You can't have "my business" without me.

I'm in agreement. Even though where I am, there are 6x of us. However it sorta started with 2x of us, each that has our own clients. We sort of work independently here..I have my clients, -C has his own clients, -J has his own clients. We're the 3 main engineers. We have that close relationship with our clients. If either of us left, not sure our clients would want to stay with the company.

 

[Markverhyden]

At most you might be able to get maybe a thousand, or two if your lucky, by giving a buyer the contact list and a joint email communicating the change. And to even stand a chance at that you'd have to have all the revenue broken out by address for several years.

 

[LordX]

At most you might be able to get maybe a thousand, or two if your lucky, by giving a buyer the contact list and a joint email communicating the change. And to even stand a chance at that you'd have to have all the revenue broken out by address for several years.

Yikes that's it? Even for the google standing / reviews / web addresses etc? If that is the case, better to keep some of the customers that I can service remotely and keep making some money that way. (I am possibly moving)

 

[britechguy]

Yikes that's it?

Yes, probably. As has been noted, for tiny business the relationship between the service provider and the clients is "everything." Were anyone else to buy your assets, they're going to be hearing, "No," a lot more than, "Yes," because they are not you.

No one is irreplaceable, but when the time comes for a replacement to be chosen, there is no great value in "the new owner" that's a completely unknown quantity.

I'd certainly think about remote support for existing clients where that's possible. Even as just a side gig, it could be nice.

 

[lan101]

Yikes that's it? Even for the google standing / reviews / web addresses etc? If that is the case, better to keep some of the customers that I can service remotely and keep making some money that way. (I am possibly moving)

Yeah I would think keeping it remotely for what you could would be way better. Certainly a lot more revenue would be made versus a 1 time sale. I'd say as long as you don't mind remote work it'd be the best way.

 

[Markverhyden]

Yikes that's it? Even for the google standing / reviews / web addresses etc? If that is the case, better to keep some of the customers that I can service remotely and keep making some money that way. (I am possibly moving)

Yep. For many of us we are a service business. Service businesses have always had a lower valuation compared to manufacturing, wholesaling, retailing, etc. Especially services without contracts. Try the link below to see what "they" think. But I'd bet if you talked a real broker their answer wouldn't much different than what you've seen here. I'd agree with the concept of keeping whatever you can and servicing them remotely.

Valuation Calculator

exitwise.com

 

[LordX]

Yep. For many of us we are a service business. Service businesses have always had a lower valuation compared to manufacturing, wholesaling, retailing, etc. Especially services without contracts. Try the link below to see what "they" think. But I'd bet if you talked a real broker their answer wouldn't much different than what you've seen here. I'd agree with the concept of keeping whatever you can and servicing them remotely.

Valuation Calculator

exitwise.com

Yeah - showing $200k to $300k when I put in the information. Now THAT I would accept to sell outright. Too bad reality has to play a role in this!

 

[Shaiboo8]

Selling your business could be worth considering, especially with loyal customers and positive online presence. The cache of loyal customers and good Google rankings/reviews can add value to the business for a potential buyer. It's worth exploring if there are interested buyers who recognize the potential in your established customer base and reputation. Assessing the market and seeking professional advice may help you make an informed decision.

 

[callthatgirl]

I closed my stores and onsite in MN in 2013, I found referral partners to handle any work I could not do remotely. This was when I was niching into my current work, so it was a good decision. One partner still sends me quarterly commissions, the others faded off but these folks are consistent and do good work.

 

[Terry Higgins]

OP, did you sell your business or not?
I don't know if he'll reply, seeing he was last active in January, but worth a try.

 

[HCHTech]

One thing you could do if you have the inclination and the time, is bring on a partner, even if you have to sacrifice your own compensation to do so. Bring them on all calls to start, and if they survive that, make a plan to transition from you to them, could be 12 months, 24 months, or even longer. Make your deal so that once your out, they pay you 20% of revenue per year for 3 years or something like that. This has a higher chance of customer retention and allows the business to keep going without you, but it's not simple or easy.

Edit: Just realized this is a necro-post. Oh, well - the advice stands! OP last posted in 1/24 with a laptop problem, so I guess he decided to keep going...

 

[MatthewLWilson]

Interested, too.

Someone mentioned he might get a thousand or two if he's lucky. I disagree. You just have to try selling it in different places. For example, on https://acquire.com/sellers/ you can get good deals because it can help you connect with potential buyers who value those aspects of OP's business.

EDIT: to clarify what I meant to britechguy

 

[britechguy]

I disagree. You just have to try selling it in different places.

What on earth do you mean by "try selling it in different places?"

This is a one-person, local, residential break-fix business (see post #1). It can't be physically relocated, nor are there myriad local venues where attempting to sell such a business.

I stand by what I said earlier. In today's market, in addition to the other factors involved, trying to get anyone to buy such a business would be difficult, indeed, and the value would be low. There is no steady income stream anymore in this type of business. It's essentially "a side gig" from which no one makes their living. That age is long past.