Selling a Hire Business by Don Wilson.

BCI is indebted to Don Wilson, a legendary Business Broker in the Sydney sales scene. Don was and is the gun when it comes to selling hire businesses. Here is Don’s take on the industry and a few tips on selling hire businesses.

“From 1970 to 1981 I owned a hire company in Sydney, Active Hire Centres.

At that time the industry was made up of several dozen independent hire businesses in every state and a few bigger ones. Kennards Hire was active in the construction industry and was a leader along with Macbro in hiring to the public. At that time, whoever was closest to the site got a good share of the hire, however the lion’s share went to Coates, Active Hire Centres and Wreckair Hire.

Takeovers became fashionable from the late 90s and continued in the early 2000s. Any hire company wanting to sell could go to Coates Kennards On Site and be fairly sure of a sale. Brokers including myself also had a share of the spoils and mostly sold the businesses to the big three.

The industry is now dominated by these players. Most of the good independents have been swallowed up by them. The few strong hire businesses that are left are mainly family businesses, second or third generation who would not sell without an astronomical offer.

The traditional way to value these businesses was a dollar paid for each dollar of turnover depending on the state of the equipment. If the equipment was old a buyer would often tell the vendor if they sold the equipment themselves the buyer would give them a small amount for their customer list, the phone number and notification to the customers that the buyer had taken over. The exceptions to these rules is when a potential buyer really wants to be in the location of the business. Extra money can also be paid where a business has outstanding equipment. (Not many of them around).”