I'm considering buying the company that I've been working for for the past 5 years or so, and in doing so I've realized I have NO IDEA how to evaluate what a company is worth. The company is fairly small - 4 employees including me, a bucket truck, chipper, dump truck w/ 20 ft crane, chipper - with a pretty awesome reputation in the area and enough work to reliably keep the crew going + a bit if I wanted to expand - they've been around since the 70's and they're just plain good to people/their customers. The difficulties are: most of the equipment is fairly old and will definitely have to be replaced in the very near future and the company is still using the techniques of the 70's - which is to say that customers (and the other employees) will expect that I spike up their trees, flush cut, top, etc etc. (which I obviously don't want to do!)
So... any advice out there on pricing an entire company? I've heard that one years gross is a common yardstick for this sort of thing, but I don't know if that's true, and I don't know how to factor in equipment replacement and such even if it is true...
Thanks!!!!
So... any advice out there on pricing an entire company? I've heard that one years gross is a common yardstick for this sort of thing, but I don't know if that's true, and I don't know how to factor in equipment replacement and such even if it is true...
Thanks!!!!