# how much am I worth

I have a great location in a college town in California. I am an absentee owner and want to sell. The place has great numbers. We will do \$600k in our second year. Unfortunately, with no profit. The managers spend all of the money we take in. Payroll is 35%. its killing me. What should I list the store for. It would be a great location for someone who wanted to run it themselves. I don’t have the time.

Typically, 3 times cashflow, but you answered that already with the “no profit” comment. You may get lucky and find someone to pay you more than they should, but really if you want to sell, get in there yourself. Lower the costs, raise the sales, make it look attractive to a buyer… or… take what you can get, and get out.

Another formula you can use (and this is just a basic formula that will give you a “ballpark price”) is \$15 x weekly sales. If your store is doing \$600k, divide by 52 weeks = \$11,538.46 AWUS. Multiply \$11,538.46 by \$15 = \$173,076.90. This is NOT an advantage for you. This formula is a buyer-friendly formula, but it is nonetheless another option. -J_r0kk

J,
If the store is doing 0 profit,would someone really pay \$173K?Seems like that would be foolish.I could maybe see the profit each week X 15.
I’ll get my pizzeria up to 500K in 2008.If anyone is interested I’ll sell it anyday of the week for \$150K and give you free rent for 2 yrs.
D

If the store is doing 0 profit,would someone really pay \$173K?Seems like that would be foolish.

D,

Not necessarily foolish… and like I stated before:

(and this is just a basic formula that will give you a “ballpark price”)

As an investor/potential owner you would no doubt look at the entire picture of a restaurant shop, wouldn’t you? It’s never black and white, there’s always gray area. Besides, there aren’t too many people out there doing \$11,500 a week, running good numbers, making at least 10% profit without even being there… and want to sell?

As the original poster stated, the store is running 35% labor on \$11,500. He also stated there was no way he could get back into the store to help this situation. I was just trying to give him a realistic idea of a “ballpark price”.

Now, let’s ask a question: Do you as an owner/operator think you can get Labor% down to a more respectable 23% in a store averaging \$11,500week? If so, you’ve just increased your stores profit to about \$55k a year. That, of course, is just one scenario. There are always other tangibles that will make the deal or break the deal so you can’t just look at the labor savings, but \$55k x 3 = \$165,000.

Would I pay \$173,000 for a store doing \$11,500? No. But do you also think a store doing \$11,500/week is only worth the price of the equipment? How would you price it? Please let me know in a responce. -J_r0kk

He can easily list this business with manager’s salaries as an addback. If I was a buyer in your market, I would look at this store. \$600K and no profits? I have a store doing \$450k and makes \$130k. I suspect there are many cost reduction opportunities available. That being said, I would not buy it at \$173k. I’d maybe consider something in the \$75-\$100k range, depending on if I liked what I saw when I looked at the numbers.