WicklowGael
Registered User
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The business has a projected turnover in 2016 of about €500,000 with a net profit of approx €150,000.
Should I try and directly contact my competitors in Ireland and UK with a view to buying the company?
How is the value of a company priced?
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?
Ask your accountant for advice.
There is a lot of various ways of valuation and its trying to get one that suits both buyer and seller thats the hard part.I had this very conversation with a relative who specializes in buying companies, and asking him how he values a company, his rule of thumb, was to value a company at 5 times its gross profit.
The previous company I worked for was sold for €1.2 million, and had a GP of €250k per year.
Only Beer Mat economics, but..
The net profit is after my costs such as salary,pension, company car of approx 55K per annum, sotaking these costs out of the business, the profit would be approx 200KDo 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.
Sounds like you have built a good business. Well done.The net profit is after my costs such as salary,pension, company car of approx 55K per annum, sotaking these costs out of the business, the profit would be approx 200K
It is in the service industry, but I have created a business that can operate without me. I have a good team capable of running the business.
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?
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