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Gross sales buyout
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| PCOpug 2005-10-09, 7:21 pm |
| This is a little off-the-wall for this group .
But I wonder if there are any others out there who run into this situation ;
Pest Control Operator or Odor Control Operator is offering to sell business
.. Business consists of service contacts usually monthly or twice monthly .
No tangible property , just gross sales .
Is paying 100% of one year gross sales the normal asking rate ?
Seems high to me , but I've heard this before .
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| bugs@bugs.com 2005-10-09, 11:21 pm |
| Last I heard Terminix was offering $1.50 per $1.00 on a buyout of a Pest
Control Related Business but that was several years ago and I am sure things
have changed since then.
--
I wish you all the best
Tim Wise
www.onepest.com
www.askourpros.com
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| Budget Bug Man 2005-10-10, 4:21 pm |
| In my experience contracts go for 70% to 100% of years gross income.
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| bugs@bugs.com 2005-10-10, 8:21 pm |
| Jeff remember when I made my ex-partner buy me out and I started this
company, we checked into it back then and Terminix was paying $1.50 at the
time per $1.00 in this area but I don't know if they still are. I know I
wouldn't offer that much.
--
I wish you all the best
Tim Wise
www.onepest.com
www.askourpros.com
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| PCOpug 2005-10-11, 1:21 am |
| Yea..Back in the 90's ...Them boys'ed pay top dollar plus to make a bottom
line larger . Servomaster . Ecolips would sell soaps'n fancy gadgets w pest
control .
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| Budget Bug Man 2005-10-11, 11:21 am |
| Tim, I just know when I sold my company they paid 90% of years gross
income, divided the payment over 2 years.
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| bugs@bugs.com 2005-10-11, 10:21 pm |
| The info we had Jeff very well could have been old. We used it for a
reference though and it worked for me...;o)
--
I wish you all the best
Tim Wise
www.onepest.com
www.askourpros.com
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| There are some other factors involved, such as the cancellation rate,
and allowance rate, along with age of contracts (and are they real
contracts or verbal agreements), but there is a high-low range most
majors offer for pest control service. Purchase usually includes
advertising, equipment and good will,etc You can assume that absolute
top end is 14x your monthly revenue, or $1.40 per $1.00. If your
cancellation rate is higher than 2% you should see less value in
contracts, down to about 80 cents. Most companys that buy other
companys provide for proportional payements over
a year or so, with reduced payments should those customers cancel above
some established %. I just bought a route from a competitor -
customers only no other assets - and paid straight up 12x monthy
charges.
Sam
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