How Do I Sell My Client List?

[Sore-Paws]

Hi everyone,
I have a Pet Minding & Residential Pet Sitting Company I started up in 2002. I am a sole trader. It is now an established business with a regular daily/weekly clients + occasional client bookings. I am now planning to move to another part of the country and shall be pursuing another type of business entirely.
In an attempt to keep the whole procedure simple and straightforward I have decided to offer only my Client List + a Personal Introduction to my regular clients for a fee. However, I am not sure how to value my Client List & Personal Introduction. I have looked at other websites and forums where people are asking about selling their 'traditional' B&M businesses, which really doesn't relate to what I'm selling. I have read in one place that in order to calculate the value of your (B&M) business, you need to look at your last 3 years of turnover concentrating on your most recent year's turnover and times that by 3. i.e. 3 x £24k = £72k and that is your value. That sounds much too simplistic to me (or is this in fact a fair estimate/indicator?)
Of course, I know how much money I make each year and my overheads are mainly running costs for my vehicle + some occasional printing & posting and replacing my walking boots & socks every 6 months or so! But not much else besides.
Legally speaking, do I need to show certified accounts, P&L, etc. or should my Weekly Schedule on my laptop with all my appointments, Information Pack and earnings suffice? Or is this a matter to be decided between the buyer and the seller? Do solicitors and/or accountants need to be involved by either or both parties?
Time is progressing rapidly and this is becoming urgent now so I would be extremely grateful for any advice and/or guidance sooner rather than later, please.
Most sincere thanks in anticipation...

P.S. I already have a very interested party who is a local competitor. They offer the same/similar services to my own business. However, they are a much younger company and I suspect with a lower turnover and smaller client base.

 

[JohnnyCash]

Its a hard one... I suspect your client list is worth very little, purely because of the business you are in.

If you'd been repairing my laptops and passed me over to someone else I wouldn't care, I'd give them a try and unless they messed it up I'd probably stick with them. But if you'd been watching my dog and then tried to pass me over I'd probably go hunting for someone else myself, based on personal recommendations etc.

If it was some random replaceable item like a car, girlfriend or iphone or something I wouldn't care... but my dog I definitely wouldn't accept someone saying "this person will be taking her from now on". That'd be one customer lost off the list for sure, and I suspect a lot of other pet owners would be quite picky over that too.

I'd be surprised if your customer list was worth any more than a couple of months current profit.

 

[cjsdh]

Customers are your business source, is an important resource, why sell?

 

[adamjoony]

Be sure to have anyone execute a confidentiality and non-disclosure agreement before sharing any information with them. The agreement should recite that the information is yours and is confidenntial; that any discussions or documents or information is provided only so the other party can evauate a potential business deal; that the other party will not use or disclose the information to others; and that if there is a breach, you may sue for both a certain amount of liquidated damages (e.g. $10k) and for injunctive relief (an order that they can't disclose). If you do a websearch, yoiu should be able to find model or sample agreements.

 

[TotallySport]

I agree with Jonny, its not going to be worth a massive amount and you have other things going against you, like time scale.

Normally way to really roughly value a business is 3 x years profit not turnover, and that would be in accounts which had been audited by an accountant.

The fact is, its only worth what someone is going to pay for it, if time is short, simply contact the person interested in and sit down and talk about what they are willing and able to pay for it, also take into account that if you leave and no one has taken it over, then its lost and you get nothing.

If you get more than a few thousand I would be surprised, effectively when you go, with a little bit of advertising your competition will get the clients anyway.

 

[galii]

Its a hard one... I suspect your client list is worth very little, purely because of the business you are in.

If you'd been repairing my laptops and passed me over to someone else I wouldn't care, I'd give them a try and unless they messed it up I'd probably stick with them. But if you'd been watching my dog and then tried to pass me over I'd probably go hunting for someone else myself, based on personal recommendations etc.

If it was some random replaceable item like a car, girlfriend or iphone or something I wouldn't care... but my dog I definitely wouldn't accept someone saying "this person will be taking her from now on". That'd be one customer lost off the list for sure, and I suspect a lot of other pet owners would be quite picky over that too.

I'd be surprised if your customer list was worth any more than a couple of months current profit.

yah, totally agree with you, that's the point and your analysis is very reasonable, admire you~~

 

[BustersDogs]

If it helps, some of my clients have asked that I continue to look after their pets, even though I have trained assistants to help me with the work load, and I suspect that when I 'give up' half of my walking route to a permanent employee at least a couple are going to leave me.

So some of your details will be worth nothing - if they have to change their dog walker anyway, they might as well look around and find someone themselves, that they can vet and interview.

 

[jaffab]

Is this not going to go against the data protection act?? If your details contain personal information (phone numbers) and you do not have express permission from each and every person to sell on their details, you could be on thin ice.

If at the time of collecting the details, you explicitly aid you were going to pass on/sell their details, you will be ok - but if not....