The nicer car is great, but any small scale business with a differentiator that revolves around undercutting everyone on price likely won’t succeed. 1) you’ll never make enough money; 2) you’ll get poor quality customers.
At $5 a trip, to make $100K gross, you need to do 20,000 trips. That’s 55 trips every single day of the year. And then you need to subtract all of your expenses.
It’s not a sustainable model. You’ll burn out.
I can’t imagine not grabbing the €2.4 million when you’re clearing just €300K profit unless you have a solid expansion plan in place that you know for a fact will get you there in the future.
You’re going to have a hell of a time selling it as a solo person with no employees. Even if you were to somehow find a superstar, you have all of your institutional knowledge in your head. Good margin, but if you’ve been stable for a few years without growth, that could be a red flag.
All this said, your best bet may be to sell to a competitor if you can. They may have know-how and like your client list.
No idea on valuation because of the above. Way too subjective.
I sold my company earlier this year. It’s a mixed bag, but ultimately good. Getting some cash was nice. At the tail end of a short earn out now and should see a bit more next month after which I’ll likely leave altogether.
100% agree. Did just this a few months ago. Sold the business and I now have both time and money while I decide what to do next.
I don’t see it as a red flag. What if the sale falls through? Why increase anxiety among the staff for a non-guaranteed outcome?
You need actual legal, financial, and tax advice. Being granted 50% of a business will likely have some tax consequences important to understand.
50/50 is a terrible structure. Either 51/49, a third partner with a minimal stake (to break ties), or a legally binding decision making process in the operating agreement… and you absolutely must have an operating agreement.
I’m at the tail end of an earnout an on track to hit just under 50% of the theoretical max. It’s more than I thought we’d do and will be a nice chunk of change. We wrote very clear terms into our agreement.