# What's My Company Worth... ?



## AssTyme (May 15, 2010)

To keep things simple lets say my OMS company takes in/grossed $100,000.00 per year after operating expenses. If I were looking to sell this company what could I reasonably expect to get excluding all tools and vehicle ?


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## KoleckeINC (Oct 22, 2011)

That's an interesting question. Why sell? Why not rent? When I retire I want 25% of all calls. I hope I can make that happen.


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## Redwood (Sep 8, 2008)

Less than you think...


Selling off all the vehicles & tools what will you get?


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## Tounces (Aug 18, 2013)

Yeah, I can't even imagine that many people who would buy an OMS.

Typical calculations are a company is worth 3x the profit it makes in a year.

However, anyone with the money to buy an OMS could just as easily buy all their own equipment. Or simply buy a franchise.


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## 3KP (Jun 19, 2008)

*back in 2013*

I had a HVAC company wanting to purchase my company and have me work for him running the plumbing department. We had lunch a few times talked about responsibilities Gave him my last 3 years of taxes and copy of my QB of that year so far. He offered me $40K for the business and $50K a year to run the plumbing dept. :no: I had to refuse that deal. He still contacts me time to time and makes other offers but no where close to what I had in mind!.


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## Cajunhiker (Dec 14, 2009)

The only real value of a service plumbing company is your phone number and the call volume to that number. Someone might pay for each call to that phone number for the next year or so. 
Used equipment doesn't have much value to an existing successful service company - in other words you won't get much for it.


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## OpenSights (Mar 23, 2015)

Saw this on my local craigslist the other day...

http://lansing.craigslist.org/bfs/4978939356.html

40+ Year plumbing business - $3200 (Lansing)

"I am ready to retire after 43 years of plumbing. I have a solid base of people who have been good customers for years. I have very good reputation. I would like to leave them in good hands. I served customers all throughout the Mid Michigan area. I have been making 80,000 yearly for many years. This is a good opportunity to strengthen your customer base, or for someone going out on your own. I also have supplies that I can include. Call Barry"

I can't say I've met Barry before, but more than likely have at least have said hello once or twice. So I don't know him, company, customer base or income. doesn't say if tools/truck or anything is included.


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## mytxplumber (Jul 28, 2013)

The only way I know to get your money out is to find a family member that needs a trade. This still involves training them and investing time in them. You can offer them a deal where they take over the responsibility and taxes but you own the phone number and business name they will lease that from you. This requires a strong contract clearly defined. In return you get the terms you want which usually means being a silent partner with no legal or Liability responsibility. You get to take a percentage of profits with an option to buy you out or any options you like. If the deal falls through you take over the phone number and the business name again. There are a lot of people looking to learn a good trade. This is similar to franchising but on a different scale.


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## sierra2000 (Sep 19, 2011)

Probably worth nothing at those numbers and the fact that it's an owner operator, you are the company.


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## sierra2000 (Sep 19, 2011)

How much are the operating expenses and does operating expenses include your salary? If so, you're saying there's $100,000 in profit for a OMS just doing drain cleaning? Draw your salary from that $100K and there's not much left. Most buyers will be looking for highly profitable companies with a great track record and some kind of systems and service agreements in place. Tools may be the only value you have. 
$100,000 is great for an employee but not to a buyer.


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## plbgbiz (Aug 27, 2010)

To buy the company with no tools or equipment means you are selling the phone number and customer list only. 

If the OMS is really good, the customer list will be smaller than average (more repeat customers). That drives down the selling price. If the OMS is not run well, the customer list will be larger than average (less repeat customers) and this too drives down the selling price. Then factor in that half or more of the customers held loyalty to the OMS operator that was on their doorstep and not to the name on the van.

All of this leads to the reality that the dollar value in a OMS is in its operation by the OMS owner. Beyond that owner, it just ain't worth more than a few thousand in marketing to a somewhat pre-qualified list of sales leads.


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## plbgbiz (Aug 27, 2010)

The value of the company goes to zero if the phone number is not part of the deal. And that only matters if the phone number has been consistently in use and not changed for the convenience of using a cell. 

A phone number used consistently from day one is really the only thing of value a OMS can pass to a new owner that will generate future revenue.


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## ToUtahNow (Jul 19, 2008)

AssTyme said:


> To keep things simple lets say my OMS company takes in/grossed $100,000.00 per year after operating expenses. If I were looking to sell this company what could I reasonably expect to get excluding all tools and vehicle ?


Generally speaking, it is worth the reasonable value of your truck and tools plus $20,000 for good will(customer list, phone number and non-compete). That said, I've bought more than one OMS for $10,000 or less including truck and equipment and they were tickled to finally get an offer.

Mark


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## OpenSights (Mar 23, 2015)

OpenSights said:


> Saw this on my local craigslist the other day...
> 
> http://lansing.craigslist.org/bfs/4978939356.html
> 
> ...


Got the word about this company for sale. Aparently the old man put the son in charge who ran it into the ground. Sounds like a phone number for sale. Being a Plumbing company, I have no use for it.

Sucks when Dad builds a great company and son lets it go.... Reputation was good for many years, but reputation has gone down hill. I hear he may even go down to $1K cash for his customer base and phone number.... but iffy changing a plumbing company number with a bad rep into a drain cleaning company. Probably have low paying/bottom dollar customers.

Edit to add: I tried to buy the drain cleaning from my old boss... He wanted $50k. Net income for the drain cleaning side was about $50-75k/year but that would include a breaking down '99 ford van with close to 300K, breaking down M300, M100.... I passed.


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## plungerboy (Oct 17, 2013)

I'm meeting a guy this week who is selling his company. Can't wait to see what he wants.

The details:
OMS 23 years in business- no tools-no trucks- i am being offered a webpage,phone number,1500+ customer list-no service contracts.

For fun: what do you think he will ask for this establisment?


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## sierra2000 (Sep 19, 2011)

plungerboy said:


> I'm meeting a guy this week who is selling his company. Can't wait to see what he wants. The details: OMS 23 years in business- no tools-no trucks- i am being offered a webpage,phone number,1500+ customer list-no service contracts. For fun: what do you think he will ask for this establisment?


1500+ customers who will be calling looking for him.


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## Unclog1776 (Feb 5, 2013)

I was offered a OMS about a year ago. 20k bought the phone number used van some drain equipment. I would have fired someone on the spot if they took care of a truck and tools the way this guy did. 

Saw his tax returns from last five years, he claimed an earning of over 60k each year. 

If it wasn't a OMS I would think a pretty good deal. My prices were higher than his and I could just see spending half the day discussing how I'm not so and so when I just answered the phone. 

He ended up retiring and keeping his stuff. I've since picked up most of his commercial customers. A few of the residential call now and then I'm pretty good at weeding out the ones I don't want.


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## plungerboy (Oct 17, 2013)

sierra2000 said:


> 1500+ customers who will be calling looking for him.


Good point. But if they are calling looking for a plumber I hope I can land he job even thou I'm not the original owner.


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## OpenSights (Mar 23, 2015)

I was told to keep the phone number on a second phone for up to a few years and just explain that you bought his business. So add 2-3 years of extra phone cost, and yeah... "So and so retired/wanted out, I've been doing this line of work for X amount of years and I'd be more than happy to come out and take care of your issue if you'd like! Let me go out to the truck and get my book and see what day or time works for both you and me...."

The guy's add I saw, he is only asking something like $3200 for 40+ years in business. Sad really.


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## Unclog1776 (Feb 5, 2013)

OpenSights said:


> I was told to keep the phone number on a second phone for up to a few years and just explain that you bought his business. So add 2-3 years of extra phone cost, and yeah... "So and so retired/wanted out, I've been doing this line of work for X amount of years and I'd be more than happy to come out and take care of your issue if you'd like! Let me go out to the truck and get my book and see what day or time works for both you and me...." The guy's add I saw, he is only asking something like $3200 for 40+ years in business. Sad really.


Ask to see the tax returns. If he made more than 30k last year I would buy it.


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## Plumberdood1 (Apr 23, 2014)

I bought a one oms number two years ago for $2000.00. He was in business for twenty five years and had a great reputation. Customers are always confused when I answer his number, but I quickly explain the situation and keep the customer.

Best business purchase I've ever made. I'm still receiving calls from new customers off of his water heater stickers.


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## gear junkie (Jun 20, 2008)

Plumberdood1 said:


> I bought a one oms number two years ago for $2000.00. He was in business for twenty five years and had a great reputation. Customers are always confused when I answer his number, *but I quickly explain the situation* and keep the customer.
> 
> Best business purchase I've ever made. I'm still receiving calls from new customers off of his water heater stickers.


Can you give an example of how you explain it to them?


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## sierra2000 (Sep 19, 2011)

Plumberdood1 said:


> I bought a one oms number two years ago for $2000.00. He was in business for twenty five years and had a great reputation. Customers are always confused when I answer his number, but I quickly explain the situation and keep the customer. Best business purchase I've ever made. I'm still receiving calls from new customers off of his water heater stickers.


For $2000 you can't go wrong. For him, selling 25 years of your life for $2000 is an insult to yourself. I mean couldn't you just have worked for 2 more days and made that $2000 then walked away.


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## Drain Pro (Nov 3, 2013)

I wouldn't pay much for any drain company. There's no guarantee that the phone will keep ringing.


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## AssTyme (May 15, 2010)

Drain Pro said:


> I wouldn't pay much for any drain company. There's no guarantee that the phone will keep ringing.




If one could provide years/decades of steady income I don't see why it wouldn't be worth the investment to step right in to a great paying career ???

If the phone stopped ringing it would most likely be your own doing.


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## OpenSights (Mar 23, 2015)

AssTyme said:


> If one could provide years/decades of steady income I don't see why it wouldn't be worth the investment to step right in to a great paying career ???
> 
> If the phone stopped ringing it would most likely be your own doing.


Thats how my last boss got started. Of course many of the customers already knew him from when he worked for the guy he bought it from. It took him six years to get the momentum to be profitable enough to take himself out of the field, and 8 years to pay it off.


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## Drain Pro (Nov 3, 2013)

AssTyme said:


> If one could provide years/decades of steady income I don't see why it wouldn't be worth the investment to step right in to a great paying career ???
> 
> If the phone stopped ringing it would most likely be your own doing.



Not necessarily. The previous owner may of conducted business in a manner that you may not. Perhaps certain customers were loyal only to him. I'm only saying it because I saw it happen here. The only business that's worth anything is one that has many contracts. Aside from that, there's never a guarantee that the phone will keep ringing. For instance, a buddy of mine is a OMS. We work together often and his customers know me. If he sold his business tomorrow I know for a fact that I could take all his biggest accounts for myself, including his biggest account. That would completely depreciate the value of a company that a new guy just bought.


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