How Much Would You Sell Your Company For ?

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A

APartyDJ

New DJ
Apr 11, 2007
183
0
60
Chattanooga, TN. & Dalton, GA.
www.celebrationschattanooga.com
I Know,
It’s None Of My Business.

But

I Am Looking In To Some New Ventures And I Wanted To Get An Idea Of What My Company Is Worth?

I Feel Its Worth At Least 3 Times Gross.

That Would Be The Least I Would Let It Go For...

What Do You Think?
If Someone Came Up And Said How Much, Well How Much?
Thanks John
 
I sold mine about 2 years ago, and it went for the value of the contracts on the books, retail value of equipment and music, plus 15% of future earnings for one year.

I am sure I could have gotten more from it, but I just wanted to get out of the industry and start the band thing, plus I wanted to sale finalized before the divorce proceedings started.
 
I'm so sorry to hear that, Pat.

Me, I just moved to a new market and I'm "rebuilding." (Isn't that what sports teams do? :))

I have an incredibly faithful following for a mobile KJ with no weekly "guaranteed" shows. I can say, with relative confidence, that I carry the largest selection of classic, hard and metal rock in my market. I can also confidently say (after a singer's survey) that I am the only host who faithfully buys the latest karaoke songs in the Pop and Country genres. I get requests for new karaoke songs and fill them (if they're legally available) in 1-4 weeks.

I don't know what the value of my business is, honestly. I work to make it a "going concern" (in IRS tax definitions), but I've thought about folding it for a year or so just so I can build it to the point that my expenses are less than my income.

All I can say is that the karaoke businesses that I know in my market envy my catalog (or, at least, the disks I bring for my personal use if I'm not working). To me, my business is a labor of love, and I strive to do it right. Therefore, my business is priceless.
 
APartyDJ said:
So, What Do Yall Think?

If I Pull 100,000 Grand Or Just Over That / Year Can I Sale For 250,000 - 300,000 ?
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My guess is "no"... the REAL value of your business, besides contracts you already have, and the equipment you own is YOU! Anybody can buy speakers, amps, CDS.... but they can't buy YOU! IMO, DJ businesses are not like most other businesses.

( or maybe they can, but that's a whole other thread! :sqwink: )

BTW, I did once sell my busines. I wasn't a huge name. I was doing 40 parties a year in 1990 or so, for about $275 a party.... I sold my business for the value of the equipment, the value of the contracts I held, and about 15% more TOTAL.....
 
The real value in any business is you.... When I moved to Maui I tried to sell my business contacts there,,,, nobody would do that.

I had a number of "regulars" schools, companys and so on.... and this is the truth,,, every single one, when I talked to them and told them I was moving they should contact DJ Pep at Pure Energy Productions, said something along the lines of,,, we'll find somebody on our own.

Were they mad at me? Why wouldn't someone go with who I recommed? I gave Phil my list and he booked one of them....

The value is not your gear, you bad ass music selection... it is you.

How much can you sell it for? What do you feel it is worth? How bad do you want to sell it?

Do you think your client list is worth something? Your 800 number?
 
I can't comment on what you can get for the sale of your business, but I don't agree that the value of your business is just you unless you are a single op.

As a multi-op, if I stopped DJing today, my business could and would go on successfully. You all forgot about the value of your business plan. John Allo is selling his business plan for doing just one type of service. If you have taken the time to create a system (system of booking clients, system of training staff, system generating prospects, system for customer service) that is able to be followed by someone else ... well you have something worth purchasing.

If you are just selling your equipment / current contracts / name, then you aren't really selling something that is going to be very attractive and worth spending more then the resale value.

I believe that Robb Smith sold his DJ company years ago for a very nice profit. If you have any questions, he might be someone to talk to. He runs a business in Tampa FL and also runs FAME DJ School.
 
kellys said:
As a multi-op, if I stopped DJing today, my business could and would go on successfully. You all forgot about the value of your business plan. John Allo is selling his business plan for doing just one type of service. If you have taken the time to create a system (system of booking clients, system of training staff, system generating prospects, system for customer service) that is able to be followed by someone else ... well you have something worth purchasing.
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John might be the exception to the rule here. He took a unique idea and ran with it. A DJ business no matter how good a business plan isn't a unique idea. There certinaly might be some things you do that others dont but anyone interested in buying could easily watch and duplicate
 
Jeff Romard said:
John might be the exception to the rule here. He took a unique idea and ran with it. A DJ business no matter how good a business plan isn't a unique idea. There certinaly might be some things you do that others dont but anyone interested in buying could easily watch and duplicate
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Jeff,

If that were the case, all of us would be getting $5000.00 a wedding, I mean if Peter Merry can get it, shouldn't we all be able to easily watch and duplicate?
 
Agreeing with the others...if you are a single op or family op, the value is in you...you can value the equipment in black and white, and you can estimate the potential for business, but the new owner can either drop the ball or run with it with no guarantee implied on potential for new business.

If you are a multi op, you increase your value by selling your network of associates, and if you have advertising and websites or other tools, that also increases the value.

If you can sell the business with a model intact that self propagates income, it would be of more value than a model that requires you to solicit jobs or a model that the income comes word of mouth from your associates.

I am a sole proprietor model. I could sell my business tomorrow for the equipment value, and if I meet the right person, a little more with the guarantee of turnkey jobs...but even if I sell the jobs, who is to say the client wont cancel them when they hear I am no longer involved? If I wait even longer, I may be able to sell someone for more money with a look at my books and earning potential, but when you start looking at that kind of money, it would almost be better off starting from scratch...

So in conclusion, your value to the buyer depends on what, exactly, you are bringing to the table.
 
I'll sell you the company for $12 and a case of Coors Light.

If you want to use the name, trademarks, source code, copyrights -- that will be an additional $10-15 mil :)


As mentioned, it's all a matter of what you bring to the table, IMHO.

Having said that -- I don't care to sell my company -- I finally found a job I like :sqbiggrin:
 
You have gotten a lot of great input on your valuation question.

It comes down to "You are selling "You" when you get a gig, get a contract signed, etc.......

We could look at it like this....If a local Band in your area bought say....The equipment and the rights to the "Eagles" business, what chance do you think they would have doing the same revenues "The Eagles" do, and have done? There is no correlation.............Same applies to anyone in the Entertainment business, it's a me, you business.

In a nutshell, the value of your business is the "Depreciated Current Value" of your equipment. Short & Sweet.........No more, no less.
 
kellys said:
Jeff,

If that were the case, all of us would be getting $5000.00 a wedding, I mean if Peter Merry can get it, shouldn't we all be able to easily watch and duplicate?
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Kelly,

Peter might be another exception to the rule and not really a good example. Peter lives in a market where you can get $5000 per wedding and he has the nuts to ask for it. Peter in a recent interview also said he would be soon doing his first wedding in over a year due to other interests (read in to that what you may). Without Peter the value of his business is gear plus bookings

Randy Bartlett might be a better example. According to him he regularly gets well over $2000 per gig and works alot and yes Randy can be duplicated if someone had some talent. He sells you the tools to duplicate him. Again you may not be able to get what he gets per gig in your market or mine but you can do what he does
 
Another exception to the rule would be selling a name with a sterling rep...I mean, if the guy is in a metro area where his business name is the one that comes up for dj work, and he has a storefront, or maybe a gangbusters website that has a history of generating income, regardless of who the owner/manager is, that is an added value to selling the "franchise".

I have a great name here, but it is me...so no value at sale, however if I have been the man for 20 years with 6 DJs under me and steady clients coming in, I can step aside and let someone else handle that, and that is a value at closing....
 
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