Selling my dog walking business

[Farli84]

We are moving to Australia in September and so therefore need to try and sell our dog walking business.

The business has been running for just over 3.5 years. It started out as just me but I now have 6 self employed walkers working for me.

I no longer do many of the walks myself due to having a young family but I do run everything. I liaise with all of the clients, set up new clients, create schedules for each of the walkers and I invoice the clients at the end of each month. I pay for the pet business insurance and have each walker named on the policy too.

I pay the walkers 75% of whatever I charge the client and keep 25% for myself to cover everything I do.

The business has grown so much, way beyond any expectations I had when I set it up back in 2014.

I invoice around £5000-£6000 a month and keep around £1400 myself. I only work a couple of hours a week. I do liaise with all clients and if there are any issues throughout the day it is down to me to sort so it can mean I am doing bits of work throughout the day but I sit down once a week to do the schedules and once a month to do the invoicing.

It is looking like the turnover for this financial year is around £65,000.

It is a great little business and I am sad to see it go. We are number 1 on Google when you search for dog walkers in our town and we recently won 'Best dog walking provider' in Cambridgeshire.

I have approached each of the walkers to see if they would have any interest in taking it over. I would give them the brand, the uniform, the client list, the walkers and the branded vehicle. They would own the website and all of the social media. For this we have asked for £25,000 and hoped to get £20,000.

The two main walkers currently earn around £1200-£1600 a month and they work around 4-5 hours a day max. If they owned the business and therefore kept 100% of their walks plus 25% of all of the walkers walks they could earn around £2500 a month so would earn their investment back easily within a year.

Unfortunately they don't have the capital to be able to buy it from us. They worry that the clients and/or walkers would leave and they would have spent the money and not have the business.

It would obviously be cheaper for them to set up themselves, build their own website and create their own brand. They know the clients so would be able to offer them the same services in the hope they would stay with them and the business would just be called something different. However, they wouldn't have the reputation we have built and their website wouldn't get as many hits.

I was wondering if anyone had any advice at all please? I really don't want to see the business and brand fold. I don't want to let my clients down and I don't want anything to change for my walkers.

Thanks in advance.

 

[Mr D]

Can you get a manager in to run the business and keep the business as yours?

Can any of your walkers buy the business without cash up front?

 

[Farli84]

I'm not sure how it would work with a manager as I am not sure what to pay them. I can't reduce the walkers to less than 75% but I'm not sure anyone would manage it for less than 25% so what do we get?

It is an option to see if they could pay a monthly fee to buy the business. It is all totally new to me and I don't really have a clue where to start....

 

[Mr D]

Sorry, when I say get a manager I was thinking employee, you pay them a wage. The 25% belongs to the business and is used to pay the bills including wages.

 

[Farli84]

Could definitely be worth exploring, thanks.

 

[The Byre]

This link might help - http://ukbusinessbrokers.com/

Give Clinton a call and say 'Hi!' from me!

 

[Minuteman Press]

Offer staged payments? Perhaps related to key milestones. eg 50% up front, 25%, 25% subject to criteria / time.

 

[Scribe Copywriting]

Offer staged payments? Perhaps related to key milestones. eg 50% up front, 25%, 25% subject to criteria / time.

Sounds like a good option. If you're just managing the business and not doing any walking yourself, can you do it remotely? Do you have to let go of the business when you move?

 

[SH247]

Do you have any younger family/friends that you could get in to do the things you do while keeping ownership of the business? You could teach them the ropes and from what it sounds would be very little work for them with a good reward. Perhaps with sight to them taking over the ownership when ready?

 

[Nico Albrecht]

I am not sure what you would sell as a business since all of it can be copied very easy and you have no assets. You may have a small customer database but this is worth very little. What I do not get is what you are trying to sell your walkers. If they would be smart they can take over all your customers cut you out and offer it 25% cheaper than you currently offer. I also assume you dont have any long contracts +6 month with your clients guaranteeing daily and weekly hours that might be worth something. If you would offer me your business I wouldn't pay more than £1500 for it as a good will for your customer base. Customers are not loyal and can move on very easy. Sorry for being blunt but I dont thing at 65K turnover with no assets and 6 self employed people you have a business you could sell. Offer your self employed staff to repay you month etc... as mentioned before in a post.

 

[Sparx]

Sounds like a good option. If you're just managing the business and not doing any walking yourself, can you do it remotely? Do you have to let go of the business when you move?

I think with OP moving to Australia, managing a UK business is going to be hard with the huge timezone difference. E.g. if needs to make contact with clients and the walkers it will be difficult.

Nico's post makes a lot of sense, I think the business is massively over-valued. It is purely a brand and customer base - I would ask for ~£5k, if one of the walkers can achieve this then winner winner. I would then take it, give them everything and enjoy your new life in Australia.

Just my 2p on the matter.

 

[Gecko001]

Have you tried some of the big pet store chains. They might be interested in such a business model.

 

[Jessica A.]

Can't you still run the business even if you move to Australia? Do you have to let it go when you move? I think you can still run it remotely. You can have one of your trusted walkers manage it there but you're still going to do the rest of the work like keeping your page up to date and of course keeping the financial side of things.

 

[Julia Sta Romana]

Can't you still run the business even if you move to Australia? Do you have to let it go when you move? I think you can still run it remotely. You can have one of your trusted walkers manage it there but you're still going to do the rest of the work like keeping your page up to date and of course keeping the financial side of things.

I think this would be a viable option. Just train some of your walkers to take over some of the work (like face to face liaison with clients). I think this would also be a great opportunity to expand your business to the UK. Shift to a franchise model and replicate the system.

 

[Farli84]

Thank you for all of your ideas and feedback. I wouldn't be able to run things from Australia, just because of the time difference really and the fact clients/walkers often have last minute requests and will call/text me.
I could give one of the walkers control of the 'inbox' and still look after the invoicing, website & social media I guess. I just don't know how it would work financially? I guess whichever walker took over the bookings/scheduling could keep 100% of their walks. I could then still take 25% of all of the other walks....

 

[dan19900]

I am not sure what you would sell as a business since all of it can be copied very easy and you have no assets. You may have a small customer database but this is worth very little. What I do not get is what you are trying to sell your walkers. If they would be smart they can take over all your customers cut you out and offer it 25% cheaper than you currently offer. I also assume you dont have any long contracts +6 month with your clients guaranteeing daily and weekly hours that might be worth something. If you would offer me your business I wouldn't pay more than £1500 for it as a good will for your customer base. Customers are not loyal and can move on very easy. Sorry for being blunt but I dont thing at 65K turnover with no assets and 6 self employed people you have a business you could sell. Offer your self employed staff to repay you month etc... as mentioned before in a post.

They're selling the customers. Amazon or Ebay can be copied fairly easily too, still expect they could manage to sell their company.
I'd happily buy it for 15-20k if I lived in the area, sounds like a nice little business.

 

[Nico Albrecht]

The numbers of the business do not add up at all. Ebay and Amazon cannot be easily copied. The amount of money they had to spend on marketing to get to that point and their web infrastructures to be built left alone. Same goes for Uber, the spend hundreds of millions to get to that point. The problem is with the numbers in the business that do not make sense. £1200 on 5 hours x 5 days / week gets you close to £8/hour once you have put holiday etc... on it too. Also why only work 5 hours a day when you could work more which indicates a scaling issue or the market in your area is exhausted. £65000 pays for all the salaries but no real profit is being made and profit money would go at some stage to marketing / advertising to grow further. I really appreciate that you decided to open a business and you did a good job, do not take it to negative but the next step would be scaling it to 200K and that's when you will need money and more problems come up with it. Thin it that way if Pets at Home would see a chance to make money they would offer it or they watch you learn from your mistakes and come later into the market with much more money. Your main cost / afford is customer acquisition. They already have the customers anyway and could cross sell. It is your business and you can ask any money for it but people who would have the money to buy it would ask the same questioned and rip your numbers apart.

 

[dan19900]

The numbers of the business do not add up at all. Ebay and Amazon cannot be easily copied. The amount of money they had to spend on marketing to get to that point and their web infrastructures to be built left alone. Same goes for Uber, the spend hundreds of millions to get to that point. The problem is with the numbers in the business that do not make sense. £1200 on 5 hours x 5 days / week gets you close to £8/hour once you have put holiday etc... on it too. Also why only work 5 hours a day when you could work more which indicates a scaling issue or the market in your area is exhausted. £65000 pays for all the salaries but no real profit is being made and profit money would go at some stage to marketing / advertising to grow further. I really appreciate that you decided to open a business and you did a good job, do not take it to negative but the next step would be scaling it to 200K and that's when you will need money and more problems come up with it. Thin it that way if Pets at Home would see a chance to make money they would offer it or they watch you learn from your mistakes and come later into the market with much more money. Your main cost / afford is customer acquisition. They already have the customers anyway and could cross sell. It is your business and you can ask any money for it but people who would have the money to buy it would ask the same questioned and rip your numbers apart.

Yes it's obviously on a smaller scale, that's why OP is selling for 20k not 20 Billion. I imagine you still need to do a fair bit of advertising to get 5-6k per month revenue from dog walking, e.g rank your website in first place on Google like OP has.
You've taken the worst case scenario from the numbers OP provided, he said 4-5 hours and 1200-1600 per month. That could equal close to 20 pounds per hour if you take the 4 hour and 1600 figures instead.
I imagine the business would be better to remain small scale and stay under the VAT threshold, if you hit the VAT threshold and did a lot of the walking yourself you could earn upwards of 5k per month which many people would be happy with from a 20k investment.

 

[Talay]

The best bet is to get one of the walkers to come in and manage the "business" and provide a royalty to the current owner.

No upfront capital needed, they keep their 75% and get say 25% of the profits for managing it.

 

[BustersDogs]

Why would any of them buy your business when they have one of your own? You've fallen into the trap of avoiding paying the expenses of having staff by making everyone be self-employed. *You* are *their* customer, so why would they buy a list of your other supplies from you? I expect they all know each other already, so could keep in touch that way.

I would let them keep all the clients they currently walk, and close down. You don't earn enough money as the owner to pay a manager, or even for one of the dog walkers to take on the additional responsibility.

Try to sell any assets to the walkers you have, and let them go on their way.

 

[Hahnbeck]

I don't think what you're asking is unreasonable. Some commenters have pointed out the problems with trying to sell a very small business... these points apply to almost all businesses of this size. You're not asking a fortune for it.
If one of the walkers is business-minded and would be interested in making more money by expanding it, then even if they don't have the money up front they may be willing to pay you out of future earnings. You could structure an agreement whereby they pay you a fixed amount over regular intervals (eg: £1,000 per month for the next 18 months), or where you retain an equity stake or a right to a share of revenue (eg: you keep, say 10% of annual turnover in perpetuity, or up to a fixed amount). The latter would be more complex of course. You would need to trust the person you are handing over to in order to because taking legal action against them would be more difficult from another country.
But given that the alternative is closing down, it would be worthwhile to at least explore delayed payment structures like this, where you stand to get something for it rather than nothing.

 

[Farli84]

Thank you to everybody who took the time to reply. I appreciate those who have stuck up for me (haha) and took on board the other comments.
In my opinion we did have something to sell. Anyone starting up a dog walking business has to work full time for the first part at least, while they become established and build up a client base. Then if they wanted they can take a step back from the walks and work part time from home running things. For somebody to come straight in and be able to just work from home managing things is something to sell.
We have sold the business to one of our existing walkers. She knows the clients, the walker and the dogs. It means nothing will change for anyone and she has paid us £22,000 for it. We are really happy that this has been the outcome.

 

[Hahnbeck]

Congratulations

 

[Nico Albrecht]

Congrats for finding somebody that would pay you that money. I am in the wrong business if somebody sells a business with no protection and assets for 22K.

 

[JEREMY HAWKE]

Congrats for finding somebody that would pay you that money. I am in the wrong business if somebody sells a business with no protection and assets for 22K.

I think its a lot but
Its an establish business that you could expand over a short period of time
It has the employees and the business is obviously there It would be difficult to find 6 good people in a hurry

You would pay more for a franchise and could stand a bigger chance of being stitched up

 

[BustersDogs]

Wow.

 

[STDFR33]

£22k, yikes. Feel sorry for the buyer.

I thought you would have been very lucky to have got half of that.

 

[Chawton]

Congrats!

I think the comments are even handed tbf as they reflect the reality. It's arguably worth 22k (or thereabouts) to someone already working in the business (who effectively doesn't have to do any due diligence), and an absolute fraction of that to an external buyer who would have to-and in doing so repeatedly knock you down on price until they were eventually put at their ease.

Was your move contingent upon the sale? It doesn't sound like it from what you wrote about a September departure. Whether the buyer would have been better off just waiting for you to leave the country and pick it up for nowt is the deliciously inscrutable part of this story for me (and business generally fwiw).

Either way, I hope your move is every bit as successful!

 

[Stedurham]

Well done and purchaser hasn't been robbed will get money back in year and will no doubt try and grow the business good luck abroad

 

[Newchodge]

Don't forget there was a vehicle included in the price, which may be worth £500 or £15,000.

 

[Nico Albrecht]

There is not such a thing as a guarantee for the buyer to get his money back. One accident with a dog bad reputation or a big chain offering the service much cheaper with more money in marketing and they are out. I feel sorry for the buyer but again his decision. Again in my opinion I wouldn't have paid more than £2500 as a goodwill for the customer database. No assets here, no franchise contracts or long time walking contracts to increase value or give more money. Since it is a dog walking business you cant protect it either and level of entry for a competitor is very easy. Can't find the part for the vehicle here so I wasn't aware that there is some sort of assets.

 

[MikeJ]

I have approached each of the walkers to see if they would have any interest in taking it over. I would give them the brand, the uniform, the client list, the walkers and the branded vehicle.