Urgent advice needed

[GreyCloud81]

Hi, I need some urgent advice please.

I run a hot tub hire business with my (now ex) partner. We purchased the business last May, and have since grown the business quite a lot.

This is / was our secondary employment, as we both work in different industry full time.

The split between me and my partner is not great, and things are not very amicable between us, due to the circumstances.

I would therefore like to sell the business as soon as possible. As this is just adding to my stress, worry and everything else that i have to deal with, not helping my MH and would appreciate anyone’s advice on what to do.

The business was purchased for £900.00 last year. The previous owner, just based the business value on the assets at the time of purchase. But realised that after shaking on our purchase, that this could have potentially been worth a lot more.

Since purchasing the business, we have expanded the business social media / online portfolio, replaced items, and increased hot tub numbers.

Since taking over the business our gross has been £15k

With a net profit of £13,500. (Minus the equipment replacement, chemicals, insurance etc).

How can I value the business for a quick sale?

One of the reasons that I want a quick sale, is because we have a number of bookings in place for the rest of the year. (Total value of bookings £2k) I cant physically honour these on my own, and therefore would have to cancel. As this business is “area” based, I don’t want to depreciate the value of the business by letting people down, or cancelling bookings last minute. We are receiving enquiries daily (8 today) and I’m just having to say at present no bookings are being taken, this is loosing custom to who ever could potentially purchase the business.

The other reason is that I would like to remove my ex partner from my life. (Whole new thread)

I would just like an estimate to what the business is worth. My worry is that I would under estimate value the business and agree to a sale. As I have no contact with my ex partner, this can’t be discussed. However I am to transfer his 50% of the sale value. I am wary that if I do under estimate the value of the business, that he could take action against me.

Thank you for your advice!

I'm a bit baffled by your numbers.

Are you really saying that on a turnover of £15K your expenses were only £1,500?

My expenses for a software consultancy are higher than that.

To value the business you need to know the value of the assets tangible and intangible as well as the earnings and predicted future cash flow.

You say you bought new hot tubs, how much did you spend on that?

@Iwouldprefernotto
Thank you for your reply. I’ve been through my receipts, hire agreements etc today with an accountant and the numbers seem to be right.

We did purchase new hot tubs, but these where towards the end of the summer season and therefore where heavily reduced.

Expenses such as business rates etc, where not applicable as the business was run from our property. Water is not metered at the property, so this isn’t included. Our expenses included the new hot tubs, chemicals, filters, and the equipment we purchased for the business. We only cover the local area, so travel expenses where not included, as these where also part of my exP other company.