How to Value Your Personal Errands & Concierge Business for Sale
Thinking about selling your personal errands or concierge business? Or maybe you just want to know what it's worth? Valuing your business isn't an exact science — it's a guided guess based on similar businesses that have sold. Knowing how your type of business is valued tells you what numbers to focus on. It also helps you understand what potential buyers will care about and sets you up for a better sale price.
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The Quick Answer
For most profitable personal errands, concierge, or senior companion services, the **EBITDA multiple** is the main way businesses are valued. This method looks at your profit before certain costs and is standard when selling a small service business. Revenue multiples are rarely used unless your business is growing incredibly fast or is built on a high-tech platform. DCF (Discounted Cash Flow) is almost never used for small, local errand services; it’s too complex for your type of business.
Side-by-Side Breakdown
Revenue Multiple: Value = Your Total Money Earned x Multiple. This means looking at all the money your business brings in from client services, personal shopping fees, senior companionship hours, etc. Multiples for service businesses like yours are low, usually between 0.2x and 1x your yearly gross service revenue. It’s a simple number but doesn't tell you how profitable your business actually is. For instance, an errand service doing $100,000 in revenue might be valued at just $20,000 to $100,000 using this method, depending on its type and structure.
EBITDA Multiple: Value = Your Core Profit x Multiple. For errand and concierge services, "Core Profit" (EBITDA) means the money left after paying for things like gas, mileage, supplies bought for clients, independent contractor wages, scheduling software subscriptions (like Acuity Scheduling, Jobber, or Housecall Pro), liability insurance, and basic office supplies – but *before* you pay yourself a high salary, interest on loans, or taxes. Multiples for small local service businesses usually fall between 1x and 4x this Core Profit. An errand service with $50,000 in Core Profit might be valued at $50,000 to $200,000. This method rewards businesses that are good at making money, not just bringing in clients.
DCF (Discounted Cash Flow): This method tries to guess all your future profits and then converts them to today's money. It's very complicated and easily messed up by small changes in assumptions. This method is almost never used for valuing small personal errand or concierge businesses due to their smaller scale and less predictable long-term cash flows. Forget this one for your business.
When Revenue Multiples Apply
Revenue multiples usually apply to businesses that are growing incredibly fast and often aren't profitable yet, like tech startups. For a personal errands or concierge service, this method almost never applies. The only exception would be if you’ve built a unique, fast-growing *platform* that connects clients with many errand runners across different cities, like a small-scale TaskRabbit model you're selling to a bigger tech company. Even then, profitability would still be a big concern for buyers.
When EBITDA Multiples Apply
This is the most common way to value a profitable personal errands, concierge, or senior companion business. If you’re thinking of selling your business to another individual, a local entrepreneur, or a larger service company, they will focus on your EBITDA. Buyers will look for: * **Steady Profits:** Are your earnings consistent month after month? * **Repeat Clients:** Do you have a loyal base of clients who use your services regularly (e.g., weekly senior visits, monthly shopping trips)? High client retention shows stability. * **Clear Operating Costs:** Can you show exactly what you spend on gas, supplies, software (e.g., QuickBooks for accounting, Calendly for booking), and contractor pay? * **Diversified Clients:** No single client should make up too much of your income. If one client leaves, will your business suffer greatly? * **Good Records:** Organized financial statements, client lists, and service contracts make your business more attractive.
Important Note on Owner Pay: Many small business owners pay themselves a high salary, or take out extra money from the business. When valuing your business, a buyer will often "add back" any pay you take *above* what it would cost to hire someone else to do your main job. For example, if you pay yourself $80,000, but a manager or lead errand runner could be hired for $40,000, the extra $40,000 is added back to your Core Profit (EBITDA) to get a truer picture of the business’s earnings.
When DCF Applies
Simply put, DCF does not apply to most small personal errands or concierge businesses. This method is for very large, stable companies with highly predictable cash flows stretching far into the future, like utility companies or big corporations. Your service business, while valuable, doesn't typically have the scale or long-term contract predictability that makes DCF a useful tool for buyers.
The Verdict
If you own a personal errands, concierge, or senior companion business and want to sell, focus on building and proving your **EBITDA**. This means having clear records of your service revenue, managing your costs (gas, supplies, software, independent contractors), and showing consistent, reliable profit. Keep your client list healthy and diversified, and make sure your client relationships aren’t solely tied to you, the owner. Buyers want to see a business that can run smoothly even if you step away.
How to Get Started
To get a rough idea of your business's value: * **Find Similar Sales:** Look on websites like BizBuySell for other small local service businesses (like cleaning services, handyman businesses, or other errand services) that have recently sold in your area and size range. Compare their selling prices to their reported revenue or profit. * **Talk to Local Brokers:** A business broker who specializes in small, local businesses can often give you insights into recent sales of similar businesses in your community. * **Do a Simple Check:** Take your last 12 months of Core Profit (EBITDA, remember to add back your extra owner pay) and multiply it by a range of 1x to 4x. This will give you a very rough estimate. For a more formal valuation, consider hiring a local business broker or a professional business appraiser who understands the local service market.
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FREQUENTLY ASKED QUESTIONS
What is EBITDA and how do I calculate it?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Start with net income, add back interest expense, income tax expense, depreciation, and amortization. EBITDA is a proxy for operating cash flow and is used because it removes the effects of financing and accounting decisions.
Why do SaaS companies have higher multiples than service businesses?
SaaS businesses have recurring, predictable revenue with high gross margins (70-85% is typical) and low marginal cost to serve additional customers. Service businesses have lower gross margins, higher labor intensity, and often more customer concentration risk. Buyers pay more for predictability and scalability.
How do I increase my EBITDA multiple?
The biggest multiple drivers are: revenue diversity (no single customer over 15-20% of revenue), recurring revenue percentage (subscriptions and retainers command higher multiples than project revenue), growth rate (faster growth expands multiples), and gross margin (higher margins mean more cash for the acquirer). Document and systematize your operations — businesses that run without the owner command a higher multiple.