
How to value what your pet sitting business is worth?
Although there is no “official” valuations for a pet sitting business we have searched high and low and this is what we have found in our travels.
The average pet sitting business has a client life span of 2-3 years as clients move out of the service area,pets pass away, they choose alternative services such as doggie daycare or their lifestyle changes due to childbirth, loss of job etc. Thus a pet sitting business must constantly be replacing this high client attrition unlike for example an insurance company that may have the same client for 20+ years. In addition that are many factors to take into consideration.
1. Are there any employees or IC’s or is this a one person run business?
2. If employees or IC’S what % of revenue is being paid to them, a pet sitting business has a high labor cost 50%+, the only other industry that gives 50 cents out of every dollar earned is wall street and that is via their lucrative bonus packages.
3. What is the cash flow vs gross revenue?
4. unfortunately the only real assets of a pet sitting business are the ic’s/employees and a client list and there is no guarantee that ic’s/employees or clients will continue after the sale of the business.
According to Edward Jones of Kossler Jones, the pet sitter accountant who has been on both ends of 20 pet sitting transactions these are the valuations we have seen in the marketplace.
1x gross and/or 2x/net.
A X% down payment with an X% of future profits is highly suggested in these volatile economic times. If you are purchasing a business for all cash then these figures are negotiable as you have more purchasing power.