Forums: Discussions for entrepreneurs and small business.

Hi all! I`m new here so bear with me.

I own an in-home personal training business in rural Ohio. I have only owned this business since May 08 but am planning to move out of state in fall 09 and would like to sell at that time. I`ve picked up a new client almost every month since I started so the business is growing rapidly. I think I could get a personal trainer or newly graduated student in the area to buy the business (basically a website and client list) from me.

Right now I`m trying to figure out what the best steps to take are leading up to putting the business up for sale around August.

It is currently a sole proprietorship. Do I need to turn it into an LLC to sell?

I`ve read that with my type of business (no inventory, no building, no equipment) that I should multiply annual profits by 1-1.5 to determine a sell price? And additionally, how do I determine annual profit if income has increased each month?

Should I file estimated taxes? (this ties into question 1)

Should I continue adding clients so that the monthly income is as high as possible by the sell date?

Is there anything else I should do?

Thank you so much to anyone who can answer my questions. I`ve been getting a headache reading the irs website on taxes and articles on valuation. I could use some help from someone more experienced.

One thing I would suggest is to start ASAP. Your current clients will want to get to know the person who buys, or may just leave in droves when they find out that they are no longer working with you.

The problem with a business like yours is that it has been (so far) dependent on you and your personality/skill set to make it work and grow.

Another person is not you, and could lose everything as soon as you hand it over. Any intelligent business person will recognize this, and wonder what steps you have taken to make sure that will not happen.

Also, I am not sure about 1 - 1.5 times the annual value. I think you might be better off finding the right person and working something out. After all, with your move, you will likely lose everything if you don`t sell. It would be better to get 50% of a year`s profits and leave your current customers happy with a carefully chosen successor, than to get 0% of a year`s profit.

Just a few immediate thoughts.

Hi,

This is one of my favorite forum. I would say, thanks for providing this useful information. I, must appreciate the tools provided by you. Please keep updating me.

CSK
hipaa