'Bout time to bow out

[fyrmnk]

Hi all, after over 10 years in business I'm going to be backing out soon and pursuing other interests. I've been blessed to be able to do this on the side and still have solid employment the whole time, and have always appreciated all the help I've been able to receive at TIJ.

I am looking for some advice.

My business has been built on being independent and not marketing to agents. It was one of the first in the KC area to earn A+ status with the BBB and still has that (actually most the business this year has been from people finding me on there or other direct referrals). What I'm trying to decide is whether to sell the business knowing that its only value would be the reputation and equipment, or keep the corp and sell the equipment and use the corp for future adventures, or even close it. If I sell it, how do you value a business reputation?

My thought is maybe a new inspector or one currently working for someone else coming to the area might want to buy an established company to have as their own rather than starting from scratch or buying into a franchise.

As usual, I appreciate any advice you can provide. Thanks in advance. Kevin

[Marc]

I've read somewhere that a starting point is the value of all equipment plus one year of sales. I don't know if that works in HI because the truth is...YOU are the business.

Marc

[kurt]

Selling an HI biz is all about good will. What's the value of the good will?

No price can be put upon it.

If there is intellectual property or recognizable marketing iconography, that has value. If there aren't any of those things, it's up for grabs.

[Steven Hockstein]

Unless you are looking for an abrupt stop I would suggest bringing someone in as partner and transitioning the business over. The buyout terms can be negotiated from there.

From the buyer's point of view I would only want to buy the company with some type of assurance that you will not disappear after you are paid.

The value of our small businesses is substantially due to our relationships. The company names and phone numbers are not worth much without them.

[islander238]

Kevin,

Sorry to see you go. I would go with Steven's two cents and sell to someone looking to get in. There are always new inspectors looking to start out with some help. You might be able to work out a deal where you mentor and then sign on to be around for a year out two. In turn, you get a set amount of the proceeds. Win-win because he would only be getting 20 inspections in the first year. This gets him many, many more and gives him some cred right off the bat.

Best Wishes,

Brent

[hausdok]

In 2001 I sold my company for $65K plus the buyer had to take my 4-month old van and take over the payments on it. I simply put a price out there, he offered a far lower price and we met near the middle. I then did a year's non-compete during which I had to work outside of a 25-mile radius before I could kick things into gear again.

I'm not sure why Brent says someone would only do 20 inspections the first year without a partner - I did 127 my first 8-1/2 months in the business without a partner.

I've been thinking about doing something else too. I've got some physical limitations that have forced me to cut way back on the amount I do, so I'm thinking about opening a school and teaching this gig. I figure I can do it as well if not better than some of the shake n' bake firms that are churning out inspectors every ten days.

There's a young fella who would like to buy my company. If I sell it to pursue that other interest, I'll probably hang around as an employee for a year, while I work on designing a curriculum, lesson plans, etc., and continue to train him so that when I finally quit he'll be trained to a higher skill level. that way, though I can't stand behind him and watch him to make sure he provides the same level of service to my clients that they get now, I'll at least know that he'll have the goods to do so if he has the will.

ONE TEAM - ONE FIGHT!!!

Mike

[Nolan Kienitz]

I've also joined the "stepping down" ranks. I'll be going to a 'semi-retirement' state over the next couple of months.

Age/health are prime movers for me.

I'll be OK with ~4 inspections/month for the next year or so until my license expires.

[John Kogel]

Idea for a graceful retirement? Dail-a-Mentor. Wouldn't need a license for every state because the HI just hires you to tag along and help him get better and faster. Just bring your brain full of knowledge.

You could tour the country on a big bike or a trike with a windsheild, with a little popup camper trailer. You could sail up and down the coast by boat even.

[Tom Raymond]

My rig is level and plugged in. Any of you old farts retirees are welcome to camp out in exchange for a little mentoring.

Clean sheets and and the first beer are complimentary.

[fyrmnk]

Thanks for all the input. I'm going to finish out this year until my license expires, might look into doing the transition with a new buyer if the business sells, if not I can always just liquidate. Thanks again!