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how to sell a business?


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Doesn't appear the "Help Wanted - Biz For Sale" category gets hit a lot, so...

How does one go by selling their business. I would venture a guess that I would be selling "goodwill". In any case, my company is two man (one team, however) strong. We have struck a chord with real esate agents because of our process time factor (and, of course, our abilities). We are completely electronic. We picked up a quarter of our PMA within 2 years. We will be 4 yrs old in July. We have done 2500+ inspections, probably doing 700/yr (and our quality of life is great - we do not overwork ourselves). We gross about $220k + cash. Overhead is around 20%. We would train our successors and provide them all the equipment (no trucks) and a couple of laptops. We are in a hot market. Who's interested?

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If you gross $220K per year and you do 700 inspections, your average inspection fee is $314. By the time you pay for gas, telephone, equipment, vehicle, insurance, etc., I am impressed that you can run at an overhead expense of only 20%. It costs me much more than $64 per inspection to run my inspection business.

Do you also include radon and termite inspections?

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Steve,

I think you answered yourself ($314*.20=$63)

No termite or lead paint (push it to a third party), but everything else...radon, water analysis, septic, CO, well yield, mold, new construction and structural consults (few and far between).

Average is skewing higher ($350-75 a pop) after adopting a new pricing formula (spreadsheet equations - punch in the numbers and pow! I have a cost figure) mid last year, but the market is turning on us again...agents are striking the inspection clause in contracts, so our gross number will decrease.

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You and you partner do 700 inspections a year, as a team. That's about 1.9xxx per day without fail. Two inspections per day, 7 days a week, including Christmas.

Let's say you took Sundays off, your team now does 2.23 inspections, 6 days a week 52 weeks a year. A little more realistic, throw in 21 days off with the Sundays, holidays, small vacation, slow season, training to keep up with 'fill in the blank". Well, you can see where I'm heading.

Average ASHI inspections were in the 250-300 range per year. 300*300=90K.

I would say its more realistic that you and your partner did the quick 1 hour "honk and wave" that most realtors love. Even if I had a partner I still couldn't get out of an ordinary home in less that 2.5 to 3.5 hours.

I see that your from your bio your located "somewhere back east". Far east or just middle east?

It's a little hard to sell home inspectors, that are in business for themselves, on an over inflated, over stated business prospectus.

Signing off from Ohio where it still takes 20 minutes to cook grits.

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Just playing Devil's advocate...

I think two guys, if they were highly competent and well oiled, could do three a day. At least in my market. I do mostly slab on grade, relatively new houses (In PHX, 10 years old is considered old!). I average about 1 hr per 1,000 sq ft, not including doing the report.

If the team was truly well oiled and taking advantage of the latest technology, one guy could be inspecting while the other does the report. At $314 per inspection, that better be for a 2000 (or less) sq ft house. You could theoretically do three in a ten hour day.

I, personally, only do two a day. Once or twice a month I'll do three. Because I do so many construction phase inspections, I can start my day at 6 am (daylight permitting) and be done by 6pm. Granted, that makes for a sucky day.

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Steve...I apologize for the assumption and the first part of my reply.

Terence and Chris...

Our company is modeled solely based on TIME. We have a $/hr goal that we strive to achieve, so the process is engineered to meet that goal. I rounded up with the average, it is actually 675 for the past two years running. The bank deposits and our accountant, however, do not lie. The revenue figure is solid.

Our company is model of efficiency. Terence, you may be subject to the productivity "bell curve". Having performed only one inspection by myself (not as a team), I found in the third hour, I was running out of gas. My brother felt the same way. Performing inspections on 10k+ sq ft houses presents a similar problem...even the team starts to tire as you eclipse that third hour in the house. We split certain responsibilities of the inspection to each person (the same responsibilities are done every inspection - we are working in unison cutting the inspection time in half or more). My brother and I, invariably, finish at the same time. A typical townhouse will take an hour to 1:15 (including a breif discussion with the client), a standard detached... an hour to 1:30 (2000 sq ft) and so on.

We are only taking notes during the inspection. Reporting is switched off between the two members (I do my report as I'm driving to the following appt - not the safest but the most productive). I handle all the scheduling during the inspections - clients are usually on my brother's arm (he is reviewing the mechanicals of the house).

Chris - we are well-oiled and very competent (I think we would most likely be described as thorough and efficient - just as we intended in our business plan). We have had only one claim against the company - a client who did not attend the inspection, a client who is working with his third attorney because his claims are so far-fetched and frivilous. We have the ability to complete 4 inspections per day alotting 2.5 hrs per inspection (including drive time and report process, if available). We start at 9AM and usually finish at 6:30PM. We have done 5-6 inspections in a day when we got lucky and p/u two condos back to back. Our slow season is usually Dec-Jan and the back 2/3 of Aug.

The average ticket also includes ancilliary inspections (radon, well/septic, etc.). Environmental is just icing on the cake - everything is weaved into the process. Only one downfall - picking up the radon monitors will sometimes put a dent into our free time depending on the property location.

There you have it (in a nutshell) for you doubters.

Luckily we didn't have a 9AM appt today, however, I did run out to a house at 8AM to perform a water test. Now I must complete my brackets before the pool sheet submittal deadline. GO ACC! Good luck today and make some coin.

-Sling

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Originally posted by slinger2k

We are only taking notes during the inspection. Reporting is switched off between the two members (I do my report as I'm driving to the following appt - not the safest but the most productive). I handle all the scheduling during the inspections - clients are usually on my brother's arm (he is reviewing the mechanicals of the house).

-Sling

Thanks for the explanation Slinger2k.

Six inspections in one day complete with reports is impressive!

I just have one more question. You state that you complete your report while driving to the next home inspection. What type of report do you provide your clients, an audio tape or a checklist of some sort?

Thanks.

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Emailed, Word-based doc (usually 17 pages long or so). I customized the setup using InspectIt software - the report is half checkboxes and half narrative. The report gets rave reviews. I have a Fujitsu Lifebook I got off eBay (6"x10" - fits nicely in my lap - I use my center console as my mouse pad).

We do have some work time prior to catching zzzs. We email the reports (pretty late) to each other and double check them before they go to the client.

Already Bama has been ousted fromt the Dance - there goes a 2nd rounder.

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Slinger2K,

What is the location of your company?

As most experienced inspectors would not need any equipment what is the price you are asking without the equipment?

Would you be willing to stay with the company for 1 year after it is purchased?

Have you established yourself as being a member of any professional organization?

Just curious, you never know!

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