BreakThru Realty

How Are Service Businesses Valued?

A service business has little to sell except its customers, its contracts and its people, so the price rests on how likely those are to stay with a new owner.

Storefronts and parked cars along a small town main street at sunset

Reviewed by Tyson E. Sam, Founder and Broker of Record, BreakThru Realty, Florida License 3565210

Find Out What My Business Is Worth · (786) 914-1017

Recurring Revenue Earns the Higher Multiple

Route-based and contract revenue that renews without being sold again, such as pool, pest, lawn, cleaning and maintenance agreements, earns a higher multiple of earnings than one-off jobs. Show the number of recurring customers, the average ticket and how long customers stay.

Concentration and Contracts

If one customer is a large share of the revenue, a buyer discounts for the chance of losing it. Written contracts that can be assigned, a long history with each customer and a broad customer base all reduce that discount.

The Team and the Owner

A lead technician or manager who runs the schedule and the customer relationships, and systems for dispatch, quoting and invoicing, make the business transferable. If every relationship runs through you, the buyer is buying a job, and pays accordingly.

Vehicles and Equipment

Trucks, vans, trailers and equipment are valued with their condition and any finance owed, and may be priced separately. A lender will want titles and a list; a buyer will want to know what needs replacing in the next two years.

Find Out What My Business Is Worth

Tell us the type of business, the city, how long it has operated, annual revenue, owner benefit or seller's discretionary earnings, EBITDA if you track it, monthly rent and lease expiry, number of employees, how involved you are, why you are selling, your timeline and whether you would consider seller financing. A licensed BreakThru business broker prepares a confidential valuation from comparable sales and replies within one business day. Everything you tell us is confidential, the valuation is free, and nothing is listed or announced unless you decide to sell. Prefer to talk now? Call (786) 914-1017.

Questions Owners Ask

How much is my business worth?
Most owner operated businesses in Florida sell for a multiple of seller's discretionary earnings: net profit plus the owner's salary, benefits and one time or personal expenses run through the business. Where the multiple falls depends on the industry, the lease, the staff, the trend in the numbers and how much the business depends on you. A confidential valuation gives you the range for your business and the reasons behind it.
Will my employees, customers or landlord find out?
Not from us. The business is marketed without its name or address, buyers sign a nondisclosure agreement and prove their funds before they learn who you are, and showings happen after hours or are presented as something else. The landlord is approached only once there is an accepted offer, because the lease has to be assigned.
How long does it take to sell a business?
Six to nine months from listing to closing is common for a well prepared small business, faster when the price is right and the records are clean, longer for businesses that need a licensed buyer or a franchisor's approval. The escrow period after an accepted offer is usually sixty to ninety days.

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