The business has a projected turnover in 2016 of about €500,000 with a net profit of approx €150,000.
Unlikely projected profits will be looked, average profits over the last 2 or 3 years is a more convincing basis.
Should I try and directly contact my competitors in Ireland and UK with a view to buying the company?
You will probably have to.
How is the value of a company priced?
On a multiple of earnings, with much adjustment.
Will contacting my competitors, and letting them see my current contracts, put them in a position to take work from me should they decide not to buy my company?
Yes probably, but it may be unavoidable. Trying to sell puts you in a weak position.
Ask your accountant for advice.
It very much depends on what type of business you are selling. If its a retail shop, an accountant will be able to tell you easily how many weeks turnover shops of your type are going for at the moment. But for a more one off business an accountant will not simply be able to deliver the answer.
Can you have a discussion with a supplier. I know of someone with a small business who recently had a big decision to make concerning his business. Initially he was very slow to talk to his suppliers about this but he opened up to a manager at his major supplier who was able to tell him about similar issues at other companies. In that case the supplier was a multi-national, it might be different if the supplier was a small company.
Anything for sale is only worth whatever a buyer will pay at the time you are selling. That can vary enormously, you only have to look at the property price register to see wide variations in the prices of similar houses. Any opinion on the sales price of a business can only be tentative at best. That reflects not just the good or bad judgement of the person giving the opinion but the fact that the underlying reality is not fixed, you might get a very different price on a different day.
Having said that, lets look at the business, first of all as it is, rather than what a buyer might make of it.
Do the profits of €150,000 include a salary for yourself, if a buyer had to put in a manager to do your work within the business would they have to pay them a big chunk of that €150,000. The profit of the company to a buyer might be a lot less than it is to you. A multiple of this revised profit gives some indication of what the business might be worth. Unfortunately a multiple of 2 or 3 might have to be considered a good price.
What would a buyer make of the business. To what extent does the business success depend on you personally. If you are selling a product without much of a service element then maybe not much, on the other hand if you are selling a service, the business may not be able to continue without you.
A competitor might take over the best customers and close down the rest of the business, this would probably make the price lower than otherwise.
Letting your competitors see your books is undesirable, but no-one will buy the business without a good look at the company.