There are many reasons why people might need to rent portable restrooms. From outdoor concerts to weddings, these events have to rent portable restrooms from someone. Why not you? If you’re considering buying a portable toilet business, you’ll probably have a lot of questions and things to consider. One of the first questions is almost always, “Where do I buy one?”
It might be that you already own a small portable toilet rental business and you want to expand through acquisition. Either way, you’re looking for portable restroom equipment, and you may not know where to look. Whether you’re trying to buy a business outright, or you’re looking to find gently used restrooms and add them to your fleet, this article can help. Read on to learn about where to buy a portable toilet business, and the next steps to take.
How To Find A Portable Restroom Business For Sale
It can be scary trying to find a portable restroom rental business for sale. What if it’s less than advertised? Or even worse, what if it’s a scam? Of course, you need to know where to buy a portable toilet business, but you also need to know how to make sure it’s a good investment. Fortunately, there are many reputable sources that make buying a portable toilet business easy. You just need to know where to look.
You might want to expand your search and try more than one source for your new portable restroom rental business. Here are a few different ways to help make a conscious decision about buying a portable toilet business:
If you want to expand a business through acquisition, a business broker is a good way to find the right one. A business broker is also a safe way to go if you’re new to the business. A business broker can show you a range of available businesses, as well as keep you updated as new companies become available. This source might seem like a safer option for someone who is new to the business.
However, it’s important to remember that a business broker works on commission and has an invested interest in making quick sales for the most money. This isn’t always a bad thing, but they aren’t always working in your or your business’s best interest. You can use a business broker to discover where to buy a portable toilet business and expand a business through acquisition, but you need to know how much you want to spend. You also need to know the minimum current value or revenue of a business.
Another popular way to look when you’re planning on buying a portable toilet business is to check out online classified websites. There are some great online classifieds out there, and they are where people who want to sell their business go when they don’t want to pay a business broker. This can help them make more money from the sale of their business and help you pay less for it, because it cuts out the commission for the broker. Just Google it. You’ll see what we mean.
When you’re buying a business through online classifieds, you need to do a little more work to make sure the business and portable restrooms are as profitable as the person advertised them to be. Of course, you’ll be able to find good deals and great equipment at a reasonable price, but you need to be cautious and do your research. It’s no good starting or expanding a business if you’re not getting what you expect asset-wise.
Everyone knows someone who “knows a guy.” This is the essential core of networking, and you can use it when you’re considering buying a portable toilet business. Start by putting out feelers with your friends, people you know through social clubs or church, and acquaintances on social media platforms. Eventually, someone in your network will come through and know someone who is looking to sell their portable toilet business.
However, if you’re using online classifieds, you need to carefully evaluate any possible business that you might buy. If you’re planning to expand a business through acquisition, then you probably already know what you’re looking for in terms of equipment and sales. It can be a little more challenging when you’re buying a portable toilet business for the first time. Again, just make sure you’ve done your due diligence. We’ll get into that later on.
Letter of Intent
Now that you know where to buy a portable restroom business, it’s time to actually buy one. Now, you will need to write a letter of intent. This letter outlines your intentions for buying the business… so long as the business is exactly what the seller claims it is.
It’s the first step in buying any business, especially a portable restroom rental business. This also makes it easier for you to take a closer look at the business’s financial records before you buy it from the seller. You don’t want to buy a business only to find it wasn’t as profitable as the seller said it was.
Valuing a Business
When you think you’ve found the portable toilet rental business you want to buy, you need to value the business. This is to make sure you’re getting the best deal and a solid business that will make you money. But what is, “valuing a business”?
- Gather all the important financial information, including:
a. Financial records
c. Customer and supplier agreements
f. Any other financial paperwork that impacts the business’ profitability.
- Look over the company’s performance since it opened
- Use the historical performance of the company to determine its future prospects
- Decide on the valuation approach you want to use. The three most common are:
c. Cost approaches
- Determine the business value
Even when you want to expand a business through acquisition, you need to determine the value of the company. You’re trying to expand the number of restrooms you have to rent, and you also need to have the potential customer base to rent them. How much equipment you have, in relation to market demand, will help you determine “value”.
When you’re ready to buy a portable toilet rental business, there are some details that you’re expected to check out. Basically, you need to check every detail about the business you are buying. This process is called due diligence. To learn more about due diligence, click this link.
This is an essential step any reasonable business person would take to ensure that the assets and liabilities of the company are accurately represented by the seller. If the seller is accurately representing their assets and debts, this step should be easy. However, if the seller is hiding something, they will continue to try and hide it during this phase. It’s up to you to make all possible efforts to gain the information. If you can’t, don’t go through with the sale.
What to Look Out For?!
For example, if the seller says that they have six brand new portable toilets, you would ask to see the paperwork with the invoice that shows they made that purchase. Then, you’d ask to see the portable toilets themselves. You might see the invoice for the toilets and later find out that they were leased instead of being purchased. This is just one small example of how following up on details is a necessity.
Inspecting Vacuum Trucks
When you’re running a portable toilet rental business, one of the most important pieces of equipment is the vacuum truck. This truck is used to vacuum out the waste from your toilets and take it for disposal. Like any other vehicle, there are many moving parts in a truck, and fixing it can cost you a lot of money. However, unlike a standard vehicle, the vacuum truck has additional equipment on it that could potentially be in poor shape or not work at all.
Before you commit to buying a portable toilet business, you need to make sure to have a few vacuum trucks included in the inspected sale. While a visual inspection of the vacuum truck is okay, it’s always best to hire a mechanic to come out and inspect the overall condition of the truck and any included equipment. If there are any issues or repairs that you need to make soon after buying the business, you can use this information towards negotiating a price and determining the value of the company that you’re considering buying.
If they don’t have any trucks, just know that you may need them to continue expanding your business.
Determining the Business’s Value and Negotiating a Price
Your goal is to buy the best business possible and make sure you’re not paying more than it’s worth. The seller’s goal is to get as much money as they can for their business. This makes it a delicate balancing act to arrive at an agreeable price for both parties. You can start by determining the business’s value before you start negotiating a price.
During the negotiation process, you might ask the seller to pay down their debts, or to make necessary repairs to equipment. However, if the seller isn’t willing to do these things, it’s possible that you might need to offer a lower price. Poorly maintained equipment could lead to complications for you later on down the road. You might also go through a few rounds of offers and counteroffers, before finally settling on a price and terms. This can be exciting, but you also need to decide in advance how much you’re willing to pay. Also, know how much you’re willing to walk away with if you aren’t making progress towards an agreement.
Closing the Deal
Once you’ve valued the business, and you’ve agreed to a price and conditions, it’s time to close the deal. It’s more similar to closing on a house. You can start by creating an agreement to purchase a business. This is a legal document that outlines all the pertinent information about the sale itself. Some important information to include is:
- Your name
- The seller’s name
- The location and address of the business
- A description of the type of business
- List of the assets of the business
- List of the liabilities of the company
- The sales price
- The terms of the agreement—such as paying off certain debts before the sale or purchasing warranties on the equipment
- Signature of both parties
While you can write up this document yourself, it’s always better to have an attorney draw up the paperwork. This makes it less likely that you’ll have any issues moving forward and also makes it harder for one party to come back later saying that they didn’t agree to something.
Buying Portable Restroom Rental Businesses as an Expansion Strategy
If you already have a portable restroom rental business, an excellent expansion strategy is buying another. There are many ways to find the right business to buy, including networking with friends, using a business broker, or looking at online classified websites. As long as you evaluate the business and do your research, you should be able to negotiate a fair price and terms.
At Satellite Industries, we believe in building high-quality portable restrooms. We also know a thing or two about start-ups, as well as acquisitions. If you want to expand your business or start one from scratch, reach out to us today – request information!