Results 1 to 2 of 2
  1. #1
    Member
    Join Date
    Mar 2006
    Posts
    88

    how to determine a business worth?

    Our shop may be going through some changes. we want to establish the market value of the business, not the property. Is there a good and fair way to do this? we want to do it before making some changes, both in operations and the partnership. I know comps are a typical way, but our shop is more successful than the ones I've seen for sale because they were going down. any advice?

  2. #2
    Senior Member
    Join Date
    Nov 2004
    Posts
    576
    Hello Lizzy,

    You may want to check with the SCORE website for some information on this topic, including the following:

    Myth III: A local competitor sold his business for three times revenue six months ago. My business is worth at least this much!

    Maybe yes and maybe no. What happened six months ago is not really relevant to what something is worth today. What your business is worth today depends on three factors: 1) how much cash it generates today; 2) expected growth in cash in the foreseeable future; and 3) the return buyers require on their investment in your business. First of all, unless your firm's cash flows and growth prospects are very similar to the competitor firm, that firm's revenue multiple is irrelevant to valuing your firm. Moreover, without getting into the nuances of finance, even if the competitor firm was equivalent to yours in every respect and both firms were sold today, if interest rates were higher today than 6 months ago, the firms would likely sell for less than three times revenue. Conversely, if rates were lower today than six months ago, the firms may be worth more than three times revenue. In short, the value of your business, like the value of IBM stock, is likely different today than six months ago because economic conditions have changed.


    ...and this: http://www.score.org/valuing_small_business.html

    My suggestion is that you have an independent outside party with experience in these areas provide an appraisal of the value of your business.

    Best regards,

    Andrew

 

 

Remove Ads

Sponsored Links

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Similar Threads

  1. Looking at Jura - worth it?
    By jason8612 in forum Coffee and Espresso Machines
    Replies: 5
    Last Post: 09-24-2009, 06:35 PM
  2. What's it worth??
    By locobill in forum Coffee Roasters
    Replies: 1
    Last Post: 08-05-2009, 06:57 PM
  3. Are used espresso machines worth it??
    By pbmac in forum Coffee and Espresso Machines
    Replies: 5
    Last Post: 03-30-2009, 09:42 AM
  4. Whats it worth??
    By pbmac in forum Coffee Roasters
    Replies: 0
    Last Post: 01-27-2009, 05:34 AM
  5. Is it worth the $$$
    By NW JAVA in forum Coffee Roasters
    Replies: 0
    Last Post: 12-16-2005, 04:17 PM

Search tags for this page

hiw much is a coffeehouse worth
,

how much is a coffee shop worth

,
how much is a coffee shop worth?
,
how much is coffee shop worth
,
how much is my coffee house worth
,

how much is my coffee shop worth

,
how much is my coffee shop worth?
,
what is a coffee shop worth
,
what is a coffee stand worth
,
what is my coffee shop worth
Click on a term to search for related topics.