Fair selling price

Just doing a reality check here. Say you have a store doing consistently 10,500-11,500 per week, loyal customer base, over 2 years in business. Would $90,000 and 4% commission for 1 year be a fair deal? Comes with all equipment (paid for), ovens a little old but still working ok, trained staff most over 5 months there and pretty good location. Would anyone else think this is a good deal to jump on?

Sales numbers without any kind of operating expenses is useless to us. The store could be doing 11-12k a week and not make any money depending on operation costs.

Sorry

Payroll 28.5%
Food 31.0%

Monthly Expenses

Rent: 1,000
Utility 2,000
Marketing 600
CC Processing 750

Why are you selling? With those base numbers, you should be pulling some decent money.

If those numbers are correct that seems perfectly ok for a sale price.

I’d like to chat with you about the place. I might be interested in your store. TopDogz PM me when you get a chance.

Seems reasonable to me. In fact I’d be willing to put in a bid if it was located in SoCal. I looked at a place that the owner was trying to sell for $110K after being open for only 5 months. He based that valuation on “projected” revenues of $120K a YEAR! I offered $30K and thought it was generous!

With the numbers that you posted you should be making about $180,000 per year. Why are you willing to sell for $90,000?

You seem to have left a lot of expenses out however. What about permits, professional fees, building maintenance, equipment maintenance, insurance, pest control, linen cost, smallwares, driver reimbursements, chemical, office supplies, etc.?

Guess we’ll find out, but the way he says “something to jump on” makes it sound to me as if HE’S the buyer not the seller.

Thanks so much! The feedback definately helped - I really appreciate having this forum!

deaconvolker writes:

Guess we’ll find out, but the way he says “something to jump on” makes it sound to me as if HE’S the buyer not the seller.

Actually, no. They’re a husband and wife team that delivers to a Marine base in South Carolina I believe. I remember giving them a few pointers a couple years back when they were struggling. Good people.

-J_r0kk

Not enough info there still to really determine net profit. Those are some strange looking numbers for 10K per week if the store really does 10K all year long.

Some things that seem odd to me are:

I would expect rent to be 4X that high for a location doing that sales number. (1000 per week not per month would be about right)

I would expect utilities to be half that amount. (I run 1000 a month on 15K per week in my delco)

I would expect marketing to be 3-5X that high (You are running 1.3% marketing cost at 7200 per year on 550K sales which would indicate to me that you are missing some opportunity)

The only way a pizza shop can run a half million on 1.3% marketing is will a killer location which your rent would indicate that you do not have.

Are you doing 70% of your business on credit cards? If not, you are paying too much.

I would tend to stay away from the earn-out idea of 4% and just agree on a price. It is fine to have some of that price carried for some time but why leave something that has to be tracked? If the business is doing 500K per year as you state, just add another 20K to the price and whatever payement schedule you agree to and move on.

Correction, I see it now: North Carolina.