A hypothetical question for you

[Dragonfly]

If you were to sell your mobile disco business at some point hypothetically ....

would you split all of your gear and sell it off as gear

or

sell the business as a going concern with name ,website , contacts and such??

would you sell it with bookings??? i personally dont feel this would be very ethical as people have booked you and would get someone else and you would know this was going to happen in advance? , although multi ops take bookings and assign it to one of their djs?

ooohh lots of questions in one thread should be a good discussion.

just a thought over to you???

[Solitaire Events Ltd]

It would be very hard to sell the business as a going concern, unless you are a limited company and had audited accounts. It would be very difficult to put value on something like that as you would be buying the goodwill of the company.

Having been in the position of selling up recently, I know how difficult it is to value these things.

[Vectis]

:agree:

When I sold up about 5 years ago (oop North) I was a sole operator and as Daz says it's difficult to put a tangible value on a non-audited business.

I did sell as a going concern but only because I sold to my roadie at the time therefore most of my regular corporate clients were happy to continue the arrangement. I had a couple of dozen forward private bookings and I contacted each in turn and explained what was happening with the business and offered reassurance re: the capabilities of the incoming owner and from memory I think we only lost two bookings as a result.

[CRAZY K]

If you were to sell your mobile disco business at some point hypothetically ....

would you split all of your gear and sell it off as gear

or

sell the business as a going concern with name ,website , contacts and such??

would you sell it with bookings??? i personally dont feel this would be very ethical as people have booked you and would get someone else and you would know this was going to happen in advance? , although multi ops take bookings and assign it to one of their djs?

ooohh lots of questions in one thread should be a good discussion.

just a thought over to you???

I would sell the equipment separately otherwise your getting into the sort of conversations about getting the equipment included at a discount etc.

Re the ongoing bookings despite our own personal belief about how wonderful we all are--the reality is that if you confirm someone equally competent and experienced is available and can do everything required musically then most people probably wont worry too much.

Its only if they booked you because they saw your blistering performance at a friends Wedding they might pull out---because they bought YOU.

I agree with Darren,-its desparately difficult to prove goodwill--

So you have 6 Hotels who use you for their business--when the owner disappears its often the case they go elsewhere --ive seen it happen in the Insurance business--no one is going to pay a lot of goodwill money for it.

Probably the less personal your business the more value it would generate.

You would get the best value if you sold to someone you can really trust and come to an arrangement based on bookings in the 12 months after handover--thats often done in other businesses with a phasing out over the 12 months of the existing owner--a straight day one previous owner gone approach is not likely to work too well. It just breeds uncertainty---and loss of confidence which is fragile at the moment.

I would say these days a major strength is web profile and google rank--the ability to get the new business enquiries is vital now.

I know a guy in an associated business who is suffering compared to previous years not only from recession but from lack of Internet ranking--this is a business that needs £7000 a month to clear its overheads--:eek:

We should worry?

CRAZY K

[DK Karaoke]

If you were to sell your mobile disco business at some point hypothetically ....

would you split all of your gear and sell it off as gear

or

sell the business as a going concern with name ,website , contacts and such??

would you sell it with bookings??? i personally dont feel this would be very ethical as people have booked you and would get someone else and you would know this was going to happen in advance? , although multi ops take bookings and assign it to one of their djs?

ooohh lots of questions in one thread should be a good discussion.

just a thought over to you???

I agree with Crazy K about having an arrangement where you complete the booked sessions you have, but any new ones come through the new ownership.

In respect of selling, I would negotiate for the whole lot, as its not just the goodwill - DJ reputation, but also the gear that goes with the show/DJ and of course the pressence on the web etc., that make the business attractive to any new owner.

Its always good if you can sell to someone who has been involved in the business, or even a competitor. The later is even better, as they obviously want to consume you and get rid of what they consider to be real competition, and therefore are prepared to buy 'lock stock and barrel'

[Solitaire Events Ltd]

In respect of selling, I would negotiate for the whole lot, as its not just the goodwill - DJ reputation, but also the gear that goes with the show/DJ and of course the pressence on the web etc., that make the business attractive to any new owner.



But how do you put a price on most of that? Apart from the gear, you can't.

[Dragonfly]

Thanks for the replies to this guys as usual lots of good advice.

[Steve the DJ]

Having been in the position of selling up recently, I know how difficult it is to value these things.

Did you? :confused:

[Solitaire Events Ltd]

Did you? :confused:

No. Long and ongoing story. ;)

[rob1963]

I agree that you can't put a price on the business as an ongoing concern to sell it on.

When I retire, I will take the logical option.

I'll set my retirement date about a year in advance, and take no bookings for after that date.

When my retirement date arrives, I'll sell off my gear, take down my website, cancel my advertising & re-direct any further enquiries either to people I know or (if it's still here) to this forum.

Common sense, really!

:)

[Solitaire Events Ltd]

I agree that you can't put a price on the business as an ongoing concern to sell it on.



Unless it had audited accounts, is a registered company or has shares etc :)

[rob1963]

Unless it had audited accounts, is a registered company or has shares etc :)

True.

:)

[DK Karaoke]

But how do you put a price on most of that? Apart from the gear, you can't.

Well if it was me, I would look at least the income I would have potentially made over the next 12 months if I had not have sold the business, plus of course the value of the equipment - the net book value of course. This would be my starting point


Unless it had audited accounts, is a registered company or has shares etc :)

While this is true in most situations the business is still earning an income, whether its an Ltd or sole trader set-up. So, your accounts will be the amount of money (income) you declare to IR, plus expenses of course, resulting in any profit you made. Making sure to calculate the right amount for equipment of course, deducting these cost from the expenses, if you wrote them off in one year.

[rob1963]

Well if it was me, I would look at least the income I would have potentially made over the next 12 months if I had not have sold the business, plus of course the value of the equipment - the net book value of course. This would be my starting point

I don't see how there can be any link whatsoever between what you would have potentially earned over the next 12 months if you'd not sold the business...

...and how much the new owners would earn over that same period if you DID sell it to them.

Think about it.

When you sold the business you would presumably cancel your advertising, so how do you know what advertising the new owners would do & how successful it would be?

You would also have all your regular clients & venues...who might not want to deal with the new business owners, so they might decide to go elsewhere.

[Solitaire Events Ltd]

I don't see how there can be any link whatsoever between what you would have potentially earned over the next 12 months if you'd not sold the business...

...and how much the new owners would earn over that same period if you DID sell it to them.

Think about it.

When you sold the business you would presumably cancel your advertising, so how do you know what advertising the new owners would do & how successful it would be?

You would also have all your regular clients & venues...who might not want to deal with the new business owners, so they might decide to go elsewhere.


I think you have summed that up quite nicely.

(Money to the usual address)

[rob1963]

I think you have summed that up quite nicely.

(Money to the usual address)

It's on the way!

:D

[soundtracker]

Totally agree, unless the diary is full of contracted events, which can then of course be valued. But even then the contracts would have to be re-done in the new owners name and re-signed to be totally sure.