whats my pizza place worth someone looking to buy it

I have a buyer that wants to buy my pizza place and I’m not really selling it but I was going to think about it

It grosses 500k. Nets about 130k. Rent is 1600 equipment value is 60k

I was going to tell him I wanted 300k. I’m pretty sure he is thinking 250k or so. But for less than 300 I think it would be stupid to sell a cash cow

Check your PMs

The standard answer to this is 3X your net annual without fixed assets. All payables and receivables are yours to settle or collect unless you negotiate it in the deal. The concept is that a business investment should pay for its self within 5 years so if you show it paying for itself in 3 it gives the new owner room to live, grow and other miscellaneous expenses to be paid.

IF you plan on financing, do NOT expect to receive any of the payments or not all of them. If you do Great and that is a bonus! If you have to take the business back(due to non-payment) expect a long hard road to recover a loss in sales and probably employees.

I had a pizza store years ago. I used a business broker to help sell the store. It sold for $250K; I was net $100K a year(on the books :wink: ). The buyer put $100K down and the broker took $25K for their fees. I NEVER received a payment, went to court. $40K later they had a better attorney and he walked from the deal. The business broker never went to bat for me.

Just my experience!

Data from Bizcomps, Pratts Stats and the IBA Database do not support an assumption of 3X discretionary cash flow. There are hundreds of comparables to build a model from. Sure, some pizza stores sell for 3X but the averages for actual done deals are lower than that.

A lot of folks like to throw that 3X number around but reality in most cases is closer to 2X with a significant number of transactions from 1.5X to 2.5X. Fewer than 10% are done at 3X and those tend to be higher volume with a solid multi-year growth track record.

The transaction that MBramhall reports at 2.5X is much more typical.

well i am going to stick to my 300k then. we have not even opened up our dining room yet that will increase sales by another 15-20% and the rent only goes up 600 a month to 2200.

that could put my store well over the 600k a year mark

the first 28 months were just DELCO, but we are adding a 40 seat dine in area for familys and partys due to all the demands for it.

This guy is dreaming if he thinks im gonna settle for 225-250k That would be a steal from my view.
And the ball in my court, if i sell i get some money if i keep it i still make good money

Take the $250k and buy gold baby! Also stock in Chipotle. 600% increase in last 5 years. I wish all my stocks did that well. :mrgreen:

I can only agree with this. If the buyer can come up with $250k, take the money and run. I hate politics, but the bottom line is that if Obama gets elected again, interest rates are going to double. That is going to crunch credit, limiting what someone can offer you the next time you get an offer.

If the economy was on an upswing, then by all means hang on, but it is a buyers market now.

It comes down to what you want to do:

Do you have another way to make $130K per year? What about the amount you will make after increasing sales? Do you like running your place?

If you do not have another income lined up and you like running the place, why would you sell?