Scoop Masters
"If Your Dog Can Poop It...We Can Scoop It!" ™
How much can I expect to sell my business for?
These resources are typically for people who are just starting out. So what are you doing here rookie? Well, you’re either curious about what your business could sell for in the future, or you’re a well seasoned pooper scooper who is considering another line of work or is looking to expand. Either way, I’ll try to give some general guidelines.
As with any business, there are many factors involved when selling a business. These include, but are not limited to: How long you’ve been in business; How many customers you have; The value you place on your business efforts and how much the business profits each year. Other factors could include how desperate you are to get rid of your business, for instance: Do you suddenly have to move out of the area? Have you received some bad news from your doctor about a new illness? Are you going insane dealing with dogs all day? So let’s sort this out.
I’ll use my own experience as an example. After more than 15 years of scooping poop for a living, I decided to scale back a bit to spend more time with my other business ventures and to recreate more while I’m still young. Not only that, but my wife and I wanted to move out to the boonies known as the High Desert. We were simply getting tired of the crowds and the traffic that comes with it. So instead of dealing with the customers and the other scooping companies I hired to do the routes, we decided to sell them. In all there were 6 separate areas that we called routes and now we are down to three, with one more to go. We are keeping two of them because they have high stops per hour rates, somewhere in the neighborhood of 8 and 9 stops per hour. Those that have been around a while know what I’m talking about. We ended up selling the routes for one and a half times the yearly gross. And here’s why: It was an established route with a solid customer base, some customers have been with us for over 12 years, and I was not in any hurry to sell it. To me, 1 ½ times the annual gross was worth it. Especially since it only required 15 to 20 hours of work per week for a substantial income.
This brings us to the net profits part of the equation. Does it matter how much profit you make in a scooping business? Most business brokers consider the net profit as one of the selling points to a business. However, if you’re running your business properly, you are not "making a profit" Scoop Masters has not made a profit in 20 years or has made only a small profit. If you don’t know why this is important, then check out question #6 in the business resources. (When its up and running) The broker will proceed to create value to your business by compiling all of the owner perks and "extra" expenses into the equation. And there’s more to value than simply how much "profit" you make. You have to factor in the freedom of working for yourself, being your own boss, working when you want to, setting your own hours and controlling your own destiny etc. It took talking to about a half a dozen people before I found one who saw the value in that route. I had the mind set that if they didn’t want to pay as much as I was asking for my business, then I didn’t need to sell it to them. I would have just kept the hired help to run it. After consulting with other scoopers who have sold their businesses, 1 ½ times the annual gross seems to be the benchmark for this industry.
How about a small customer list with just a few customers? I have "bought" over 15 pooper scooper businesses over the years and they were from people who wanted to try out the business, only to discover that it took a certain amount of work to build a new business and they gave up. I’ve bought as few as 4 customers and as many as 25 customers. The fewer the customers, the less I would pay for them. If you have four customers to sell, don’t expect to get more that one month’s fee for them. The same holds true for up to 10 or 15 customers, especially if you’ve only been in business for a year or so. When I had the opportunity to buy 25 customers, I bought them for 6 months gross. (That’s their monthly rate times 6 months.)
What about if you’re desperate and you have to get rid of your business in a hurry? You may have to sell for a lower price, only because it can takes several months to sell a business. I’ve had a couple of instances where the customers were given to me because the owner had to leave the area in a hurry and they wanted their customers to continue getting service. I did give them a few bucks though, just as a good gesture. If you do have to get rid of your business in a hurry and you have a pretty solid customer base, don’t sell yourself short! If you have to, hire some part time help to do the route, even if you have to use most of your business income to pay for it. If it cost more to hire someone than the business generates, then you are not charging enough in the first place... raise your rates! Maybe the hired hand would be interested in buying the route if you give him (or her) some good terms.