How to value a sole trader Plumbing and Heating business

[A1Property Services]

I have been looking at the possibility of attempting to grow my son's plumbing and heating business by purchasing a potential retiree's business.What I have discovered are 2 extreme points of view.On line companies such as Preferred Commercial put £20-£40k on these.Companies like this ALLEGEDLY grossly over value all kinds of business and charge significant upfront fees and sometimes hefty withdrawal fees.
I have spoken to more traditional companies one of whom stated they had no or little value and not what they would even consider selling.
I put a similar Q. on Plumbers Forum.Most of whom didn't feel their company would much value to others as they were the company.A plumbers merchant put it quite brutally.What is a client base? A list of people who bought from you in the past.
As the client base+turnover is the main basis of valuation,what are your thoughts.I also understand that turnover is vanity,profit is sanity.

 

[CKG]

The value in a typical one man plumbing business lies in the van and stock. Unless the business has a raft of customers tied into service contracts. The customer/contract base then becomes an income producing asset with value.

In reality the value is always going to be built into the retiree and can't be unlocked or bought out.

So to build value you need contracts. Either create them or bid for them.

That's why the big players are keen to get you into contracts as it adds tangible value to their business.

That's my take on it.

 

[The Byre]

A one man company is of absolutely no value, because people are buying the services of that one man. When the man goes, he takes the value with him.

 

[VanillaOnlineAccountancy]

The value, basically, would be based on any assets such as a van,tools etc or ongoing service contracts. There is no goodwill value as the previous owner is no longer there and if his/her service is based on them carrying out the work, the second they leave there is no goodwill value.

 

[FarrellMackennon]

I would save your money and put it to better use by investing in your sons business, there are always ways to improve an existing business and it makes more sense if he concentrates in building up his current list of clients. High-quality tools and equipment and efficient transport are just a couple of ways to get started. Use some of it to promote the plumbing business with smart uniforms, good signage at the premises and on the works vehicles, and do some advertising if you really want to business to expand.