I know it’s a broad question, but here are some of the particulars:
Sales: 800k/ yr- sales up every year for the past 5 years
Cashflow: 120-155k/ yr for past 5 years.
Established for over 20 years in the South SF Bay Area
No GM, it’s a partnership.
Building is leased, for next 5 years w/ 5 year option.
Any guesses or suggestions? And yes, I have researched the topic in the archives.
There is not really enough info in your post. The cash flow number is on the low side for the volume you are doing but perhaps there are owner wages in addition to those numbers?
What does that lease option call for in rent? What is the rent escalltion over the balance of the current lease?
Are you part of a chain or a single location indi?
Do you have a liquor license? you mention sales are up, how much up for the last three years? How is 2008 year to date?
Markets also vary from place to place. In many places the value would be about 2X-3X owner’s dicretionary cash flow. That will mean that you take the profit of the business and add back one owner/manager’s paycheck (if that was not included in you cash flow number) and any owner perks the business pays for that are not required to run the place.
Hope that helps.