I want to sell my small business (window washing service at residential houses), that we opened last year. We selling a business because we are moving to another state. We have about 200 costumers, this is a seasonal service. My question is how much I can charge for selling a business and how to process the paperwork to re-sign the owners name?
There are so many variables that go into small business valuation that it would be virtually impossible for anyone to provide you with an accurate estimate without looking into, at a minimum, your financials. That being said, a service based business like yours can often be even more tricky. This is because it is possible that you and your personality are so intertwined with the business itself that a new owner could not continue your previous success. Basically, are your customers loyal to you or your business?
Since your business likely does not have many assets, other than a little equipment and customer lists, I believe the best approach is to use a multiple of your Earnings before Interest and Taxes. Also, a different and quicker route is using a service like this one http://www.bizbuysell.com/content/valuation/ that will provide you with nationwide comparables to use as a guage.
There are oftentimes many ancillary negotiation points besides just price when selling a business to a new owner so I would recommend approaching an attorney to help draw up the appropriate documentation so that you have all your bases covered. You, of course, could pull off generic templates or forms from online sources but that will probably work only if you and the new owner are merely concerned with price. If so, you could just fill in the blanks and maybe be okay. Another option, especially if finding a legitimate buyer will be an issue, is to use a business broker. They will take around a 10% commission but are well versed in all the areas of importance for the transaction, including appropriate documentation.
J.J. Thomas, JD/MBA
Entrevisor - Entrepreneur Advisory Services