Selling up and retiring early
Discussion
I have 3 threads to my business and I have thought about selling 1 or 2 of them and just doing a bit here and there on a day rate basis. I know this is a bit of a 'how long is a piece of string' question but how much is each thread of the business worth?
I have one thread running since 2002 which although I created it from a technical perspective, it could be run without me. I have 2 part time self employed people who do almost all the work (they do, I just QA it) who could run the business themselves. Based on the last 5 years it has always turned over over £35K a year with profits of £20K, often more like £50K with profits of £35K, with all the costs being the two sub-contractors. They could easily buy and run the business and they seem the natural buyers. We have no contracts with buyers but business has been pretty stable since 2002 (one year up to 70K). How much might it be worth to them?
I have another thread which has licensed two online products for a 30% share of the sales with a minimum commission tears 1-3 and subsequent minimum commissions based on 50% of the previous years commission. That memans there is something guranteed for 5 years ( a minimjum of £10k per year). I still run the web site but if I didn't I would still get 15% for doing nothing as copyright and IP owner. I think the licence holder might be prepared to buy out the product. Their projections are that it will turn over about £100K a year in 2010/11 (my % share £30K or £15K). How much might it be worth to them?
The final thread to the business is very techie and although we have a 3 year contract worth £50K a year it isn't something anyone else could take on. The buyer won't deal with anyone else and this is the area I would probably continue working on.
So is there enough for me to retire on??!!
I have one thread running since 2002 which although I created it from a technical perspective, it could be run without me. I have 2 part time self employed people who do almost all the work (they do, I just QA it) who could run the business themselves. Based on the last 5 years it has always turned over over £35K a year with profits of £20K, often more like £50K with profits of £35K, with all the costs being the two sub-contractors. They could easily buy and run the business and they seem the natural buyers. We have no contracts with buyers but business has been pretty stable since 2002 (one year up to 70K). How much might it be worth to them?
I have another thread which has licensed two online products for a 30% share of the sales with a minimum commission tears 1-3 and subsequent minimum commissions based on 50% of the previous years commission. That memans there is something guranteed for 5 years ( a minimjum of £10k per year). I still run the web site but if I didn't I would still get 15% for doing nothing as copyright and IP owner. I think the licence holder might be prepared to buy out the product. Their projections are that it will turn over about £100K a year in 2010/11 (my % share £30K or £15K). How much might it be worth to them?
The final thread to the business is very techie and although we have a 3 year contract worth £50K a year it isn't something anyone else could take on. The buyer won't deal with anyone else and this is the area I would probably continue working on.
So is there enough for me to retire on??!!
Edited by Four Cofffee on Wednesday 14th April 09:11
It depends really what your outgoings are, have you a mortgage still, loans etc? If you dont have any debt and can pull in 30k a year then that is a fair bit to live on.
As to what the business is worth, the only pointer that i can say that in Ducan Bannatynes book he said that its value is normally 8-10 times its yearly profit but.... obvioulsy this is quite varied i would imagine dependent on what it is and what lifespan that the business may have.
As to what the business is worth, the only pointer that i can say that in Ducan Bannatynes book he said that its value is normally 8-10 times its yearly profit but.... obvioulsy this is quite varied i would imagine dependent on what it is and what lifespan that the business may have.
I don;t understand.
If you keep:
There are three businesses, two of which require little or no input from you, and return you £50-60k pa. The other business you do actually work at.
If you sell:
There are three businesses, two of which are nothing to do with you, and return you £nil pa. The other business you do actually work at.
Frankly, those businesses don't sound like they're worth much, and certainly not much more than they already give you each year.
If you keep:
There are three businesses, two of which require little or no input from you, and return you £50-60k pa. The other business you do actually work at.
If you sell:
There are three businesses, two of which are nothing to do with you, and return you £nil pa. The other business you do actually work at.
Frankly, those businesses don't sound like they're worth much, and certainly not much more than they already give you each year.
I have retired early, and following a purchase of a Motorhome, (I’m not suggesting OP does the same) have spent the past few days camped around the Bude, Newquay and Lands End area of the UK.
If I was in a similar situation to the OP, able to conduct much of my business trading online, then to reside in any of the above locations, as appose to residing in London, Luton, Manchester etc. etc.
If I was in a similar situation to the OP, able to conduct much of my business trading online, then to reside in any of the above locations, as appose to residing in London, Luton, Manchester etc. etc.
CHIEF said:
It depends really what your outgoings are, have you a mortgage still, loans etc? If you dont have any debt and can pull in 30k a year then that is a fair bit to live on.
As to what the business is worth, the only pointer that i can say that in Ducan Bannatynes book he said that its value is normally 8-10 times its yearly profit but.... obvioulsy this is quite varied i would imagine dependent on what it is and what lifespan that the business may have.
I think if I could take x3 I would do it. I have no mortage/loans,a decent occupational pension waiting in 10 years at 60 and the chance to continue doing a bit of consultancy.As to what the business is worth, the only pointer that i can say that in Ducan Bannatynes book he said that its value is normally 8-10 times its yearly profit but.... obvioulsy this is quite varied i would imagine dependent on what it is and what lifespan that the business may have.
Four Cofffee said:
I think if I could take x3 I would do it. I have no mortage/loans,a decent occupational pension waiting in 10 years at 60 and the chance to continue doing a bit of consultancy.
The first company, have you approached the two contractors about buying you out?If so, what sort of value did they put on it? Can they raise the capital?
Wings said:
I have retired early, and following a purchase of a Motorhome, (I’m not suggesting OP does the same) have spent the past few days camped around the Bude, Newquay and Lands End area of the UK.
If I was in a similar situation to the OP, able to conduct much of my business trading online, then to reside in any of the above locations, as appose to residing in London, Luton, Manchester etc. etc.
I like your style, hope you're having fun.If I was in a similar situation to the OP, able to conduct much of my business trading online, then to reside in any of the above locations, as appose to residing in London, Luton, Manchester etc. etc.
Jasandjules said:
Four Cofffee said:
I think if I could take x3 I would do it. I have no mortage/loans,a decent occupational pension waiting in 10 years at 60 and the chance to continue doing a bit of consultancy.
The first company, have you approached the two contractors about buying you out?If so, what sort of value did they put on it? Can they raise the capital?
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