Hi SS Gurus,
I am in negotiation to buy a business, I got the sales and P&L for the last 3 years. I will have a meeting with the business owner tomorrow to answer some of my open questions.
The business is an indoor children playground. the owners bought a bigger one far away, and they cannot concentrate on this one any more. the sales is deteriorating for the last 3 years. which means, some more work and some more service and it will do well.
I have a friend who owns a similar business, and she looked at the numbers and advised for an offer, but she don't have a way to calculate the offer.
My question is.
is their a formula that I can apply to get an a reasonable offer?
The asking price is 235K, Net Profit for 2012, 2013, 2014 is 66K, 35K, 10K.
Based on those numbers, will I be able to calculate an offer. I am sure the answer is yes, but I do not know the answer.
The calculation I have made through Commbank website is 175,000. and another one is 200,000.
I hope you guys can help me with that. Please feel free to advice to go do some homework first and look later.
The only thing that attracts me to this business is that it can run by only my wife, and I can keep my job. it is 10 minutes drive from my home, it have a good potential as the current owner do not go their at all and his wife goes their 1 day a week, so some effort will really change the place.
your answers will be highly appreciated.
Thanks
Ram
I am in negotiation to buy a business, I got the sales and P&L for the last 3 years. I will have a meeting with the business owner tomorrow to answer some of my open questions.
The business is an indoor children playground. the owners bought a bigger one far away, and they cannot concentrate on this one any more. the sales is deteriorating for the last 3 years. which means, some more work and some more service and it will do well.
I have a friend who owns a similar business, and she looked at the numbers and advised for an offer, but she don't have a way to calculate the offer.
My question is.
is their a formula that I can apply to get an a reasonable offer?
The asking price is 235K, Net Profit for 2012, 2013, 2014 is 66K, 35K, 10K.
Based on those numbers, will I be able to calculate an offer. I am sure the answer is yes, but I do not know the answer.
The calculation I have made through Commbank website is 175,000. and another one is 200,000.
I hope you guys can help me with that. Please feel free to advice to go do some homework first and look later.
The only thing that attracts me to this business is that it can run by only my wife, and I can keep my job. it is 10 minutes drive from my home, it have a good potential as the current owner do not go their at all and his wife goes their 1 day a week, so some effort will really change the place.
your answers will be highly appreciated.
Thanks
Ram