Selling a dog walking business (liability insurance, profit, payment, budget)

[hipskind13]

I'm trying to sell a dog-walking business. One of my current employees is going to buy it so my clients know him really well already, like him a lot and really trust him. what kind of value do you place on that? It's successful, consistent and brings in new clients weekly.The business brings in over $225,000/year on average. How do I evaluate it and know what to ask for a price? It hasn't been too affected by the state of the economy, just deaths of dogs from old age... I want to be fair but started the biz 7 years ago from scratch and want to get something for my time and hard work...any suggestions?

[golfgod]

I'm not sure how to evaluate because you haven't told us anything, like EXPENSES. You say ONE of your employees, so obviously you have some (a lot) of expenses there. What about advertising? Word of mouth? Newspapers? etc.

Really what you are selling is (1) income stream and (2) blue sky.

Income stream can be affected by lots of things but mainly competition so your employee should DEMAND that you sign a non-compete (one year) clause. Anything longer is probably going to be unenforcable. Since the loss of income can't be "guaranteed" past one year the price is not likely to exceed ONE YEAR'S NET INCOME.

Blue sky. The nature of this business means that there is no readily available method of increasing revenue/profit without a corresponding increase in labor. It's not like something that is operating well below capacity and that can be increased just through some "hustle".

Beyond that, what's to stop your "well liked" employee from just contacting all the customers and saying; "I'm leaving hipskind's place the end of February and starting my own company. I'm giving a 10% discount for the first 6 months to any of my current clients who come with me."

If that happens where is your value then?

golfgod

[drshang]

This business has very little value. There are no barriers to entry, no intellectual property, no real startup costs, and your only real asset are employees who can leave on a whim. If you have some kind of long term advertising agreements or some kind of partnerships in place those may have value, but I am operating on the assumption you don't have a lot of that since you didn't provide those details.

Non-competes are a good idea, but depending on your state they may be illegal.

If you can get one year net income I would take that in a heartbeat.

[sunsprit]

From your description, there's no inventory, storefront, real estate, or other significant capital asset for sale here. As mentioned above, you haven't stated any operating expenses, but this would be a relatively easy business to start in with an advertising budget, competitive pricing, and a line-up of potential employees. Is this a sole proprietor operation, or is there an LLC or other corporate umbrella? Is the bulk of your company income spent in labor costs, UI and W/C coverage, benefits (if any), transportation costs, bonding costs, General Business Liability insurance, etc? What's your company's real bottom line net?

You need to compare these costs against what you have to offer. As pointed out above, a (former) employee or a newcomer could be well positioned to compete against your business with very little investment.

From my viewpoint, with your low-tech service business, all you really have for sale is a client list and goodwill. Absent any service contracts, your clientele can change provider in a minute to a new competitor.

So, what's the real value of your client list? From my vantage point, at the most, one year's NET income, not your GROSS income.

More likely, however, I'd bet your operation isn't worth much more than a few month's NET income because a (former) employee could replicate the business and NET income with a very minimal investment compared to buying your business. I'd also bet that a sale at one year's GROSS income could not be sustained by your employee ... they couldn't make such payment and have an income to live on at the same time, even if you gave them a couple of years to buy out the business.

[las vegas drunk]

Guys, this has seriously got to be one of the funniest one post wonder troll posts I have ever read. I have never heard of a "dog walking business", which is a joke in itself. Furthermore, I certainly have never heard of one making $225,000 a year. Can you just imagine the conversion... "Yeah, I cleared $225,000 this year" "What kind of business are you in if you do not mind me asking?" "I don't mind, I walk people's dogs for a living, and I make much more than most people who have a master's degree."

Give me a break

p.s. I used to be a pooper scooper back in Phoenix years ago (seriously). Since it was a little more work, I cleared $500,000 a year. I think I should get back in the business again LOL.

[desertsun41]

I agree with ya LVdrunk.

$225,000 a year? That is $620 per day. The averge dog walking service charges $15 per day. That means you have to do 42 dog walks each day. Since a contract dog walk is 30 minutes there would only be 48 possible time slots per day assuming one never goes to bed or has to travel from one job/walk to the next. This is if you do it by yourself

So if you have scores of employees doing this, of the $15 per walk, I assume the employee has to get at least half that which is the federal minimum wage. That means the biz owner now makes only $7 per walk.

Assuming no other expenses the owner has to do 1,350,000 walks to earn as claimed.

[Bette]

I'm sure they do more than dog walking. There was a lady just south of here who boarded her dog with a boarding place, the dog got out (no one knew) and she's sick (obviously).

A dog walker or someone who comes to your home would be as good as gold.

I was quoted much more than $15 but I know people that do this and they do very well (plus they love the animals).

[drshang]

I don't understand why it's so hard to believe someone could bring in 250,000 in revenue walking dogs.

Heck a friend of mine cleared 200,000 profit in a year selling gold, swords, armor within a video game (selling virtual swords, gold, etc on ebay). Some of those items would sell for hundreds of dollars.

I did it as a side business and didn't make nearly that much, but the potential was there.

There are tons of really bizarre businesses that make quite a bit of money. Heck, dog walking isn't even that bizarre.

[las vegas drunk]

Originally Posted by desertsun41

I agree with ya LVdrunk.

$225,000 a year? That is $620 per day. The averge dog walking service charges $15 per day. That means you have to do 42 dog walks each day. Since a contract dog walk is 30 minutes there would only be 48 possible time slots per day assuming one never goes to bed or has to travel from one job/walk to the next. This is if you do it by yourself

So if you have scores of employees doing this, of the $15 per walk, I assume the employee has to get at least half that which is the federal minimum wage. That means the biz owner now makes only $7 per walk.

Assuming no other expenses the owner has to do 1,350,000 walks to earn as claimed.

So there really are dog walking businesses? I thought this was a total joke as I have never heard of it. My apologies. I used to scoop up doggie poo, and I barely made minimum wage after expenses. Maybe I should look into this if there really is this kind of money to be made.

[dynimagelv]

I have seen dawg walkers in NYC with 10 dogs at a time.....that's $150 per walk....gould get to be profitable.....