Ok haven't posted for a VERY long time. Looking at buying an LBS. anybody who has bought, sold or has thought about buying or selling a shop, how did you determine value? Overall stable business extensive history of many years, I shopped there 35 years ago when I was a child but horrible book keeping for me to evaluate.
I know the 2.4 times EBITDA plus inventory formula but is that only inventory that is paid off? So if it has 200K in inventory but owes 100K on that inventory am I adding in the 100K paid off or the 200K figuring with normal financing of 30-45 days I will pay a good portion of that off? Current owners in bad shape with his other businesses, manager quit and staff is walking out the door on him in 2 weeks.... He has a mess on his hands. I have dealt with a similar situation while managing a tri store before. Had to clean house with staff and start from scratch so that doesn't scare me, I just don't know how to figure the value in this case.... Any help or recommendations of people to contact on business valuation is much appreciated!!!
Thanks and if this belongs in the lavender room I apologize....
I know the 2.4 times EBITDA plus inventory formula but is that only inventory that is paid off? So if it has 200K in inventory but owes 100K on that inventory am I adding in the 100K paid off or the 200K figuring with normal financing of 30-45 days I will pay a good portion of that off? Current owners in bad shape with his other businesses, manager quit and staff is walking out the door on him in 2 weeks.... He has a mess on his hands. I have dealt with a similar situation while managing a tri store before. Had to clean house with staff and start from scratch so that doesn't scare me, I just don't know how to figure the value in this case.... Any help or recommendations of people to contact on business valuation is much appreciated!!!
Thanks and if this belongs in the lavender room I apologize....