Hello Everyone, I dont post a lot but read alot. I am thinking about selling my independant pizza shop that does pickup, delivery, and small dinein. There is not any big franchises in town. The town is about 2200 people and we gross approx $230,000 a year. My question is what is it worth ? All comments are appreciated. Thanks
Sadly in today’s economy not much…
I just sold my independant sub shop (winner of 4 in a row best of subs and customer service in Longmont Colorado) for about 35% less than my trusty formula would have told me to ask for it in 2009.
My shop was doing 400,000k a year and I had to settle for $85k to sell it and carry 100%.
We first tried using a broker (whom I have used in the past) and they wanted me to sell it for $55K
My formula I use said it was worth $125k.
33% 3 years avg sales + 50% of 3 years avg owner compensation = value
Thanks for your comment it was appreciated, I was thinking somewhere in the 60- 75000 range. We were doing a buffett with sales close to the $340,000 mark but downsized for leaner more profitable business with less headache. The bottom line is much better.Thanks all comments are appreciated,
Well, you have not listed any info except for sales…so it’s kind of impossible to determine a price.
- I guess the most important question is how much is your cash flow? How much do you pay yourself + company paid perks such as health insurance, gasoline, etc. + profit.
- Do you have a lease or do you own the building?
- Do you work at the shop or do you have a manger in place?
If you’re not making money, then it’s only worth what your equipment is worth. A generic formula to use is 1- 3.5 X cash flow, at least that is what I used to price my shop. We just sold our shop for over 350K:)
A business broker can help you
At those sales levels, it probably isn’t worth much more than $30,000, essentially just the equipment. Less if your stuff is more than a decade old.