Let’s face it: the restoration and remediation business is tough, and your daily grind is a lot to keep up with. From panicked customers to soggy carpeting, you have a lot on your plate each day.
If you have been thinking about selling and are wondering “How much is my restoration and remediation business worth,” then now is the time to figure it out.
Although it can sound confusing, there are really only two elements to consider when it comes to the valuation of a restoration and remediation company. The first is the cash flow, and the second is the multiple of that cash flow that a buyer is willing to pay.
Surely you have heard the phrase “cash is king” and that is definitely an integral factor when you are dealing with how to value a restoration and remediation company. Some people enter a business ownership for the tax help it gives them, or have other ancillary reasons for doing so. You also might be worried about the EBITDA, the adjusted EBITDA, the SDE (Seller’s Discretionary Earnings, or the add-backs. But if you simply focus on the cash flow, you can more easily value your business.
“How much is my restoration and remediation business worth?” is a question you should be asking yourself.
Peruse the following chart so that you have a better understanding of how to answer it.
At this point you might be asking “How much is my restoration and remediation business worth?” In order to figure this out, simply multiply the free cash flow by the multiples to determine your restoration and remediation valuation. And don’t forget that your business will need to be debt free when you go to sell it, and that is something you as the owner will need to take care of. Also, establish an agreed upon amount of capital to have in the company’s account so both buyer and seller are satisfied. Finally, realize that there are a lot of taxes and fees that go into the sale of a business and you can expect to net 70-75% of the profits from the sale.
As the old saying goes, cash is king, and the valuation of your restoration and remediation business is totally predicated on how much cash is in your business. No matter what the current state of your cash flow, it would be a good idea to have some help managing it. At Brentwood Growth we have the wherewithal to help you find the valuation of your business and then help you through every step of your sale.
If you want to glean the full value of your business, contact us today to experience our seller side loyalty and make the most of your cash flow.