Re: Account worth

["Robert L Bass" <RobertLBass@xxxxxxxxxxx>]

"A.J." wrote:
>
> How many multiple  can one get per account with no contract usually ?

I'm not sure since mine were all under contract.  We used a 1- to 3-year
(customer's choice) contract with annual renewals.  I got 36 multiple in the
sale which I believe was common in the industry at the time.  I suppose if you
had a stronger contract you'd get more but with no contract at all an
important factor is going to be the length of time you've had the accounts.
Short average times may indicate poor client relationships to a prospective
buyer.  Another issue will be what you charge in comparison to what is common
in your area.  If you charge too much clients may be more inclined to bail
when their warranty is up.  If you charge too little fewer buyers may take an
interest since they'll have a hard time ramping your clients up to their
rates.

I've heard of a few small companies getting between 12 and 24 multiple without
a contract or with relatively weak contract terms.  I'd be surprised if you
get more than that unless there's something special.  For example, if you
install proprietary systems a competing dealer selling the same hardware may
find your accounts more attractive, especially if he's the only other one
around.

--

Regards,
Robert L Bass

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