I want to sell my business. How do i figure out an asking price?

I want to sell my business. How do i figure out an asking price?

I own a fitness club (Curves) and want to sell it. I rent the building so all I am selling is the business and the equipment. Is there any kind of formula based on gross sales or net sales that I can use to decide on an asking price?

EJ

There certainly is a formula based on gross sales and adjusted net income and for a Curves franchise it is not likely what you would hope it to be. A highly capitalized business, or a business with significant barriers to entry would command a price between 3 and 5 times adjusted net income- however, a Curves franchise has such low barriers to entry it will typically trades at about 2/3rd of annual revenue and a bit over 1-1/2 times adjusted net income. These are historical averages and there are many, many factors that will impact price. Contact a professional business broker in your community or myself for a more detailed pricing analysis.Note: Adjusted net income is net income with interest, taxes, depreciation, amortization and personal (non-business) expenses, e.g., health insurance, auto, etc. added back to the bottom line.Source(s):http://www.buysellflbiz.com/

Binky

Functioning businesses typically "retail" for roughly three years net PROFITS (not sales!), assuming they achieve an average ROI for their industry...Think about it, "buying a business" is not different than making any other investment, so the potential return is dependent on the inherent risk....if T-Bonds can yield 2% at close to zero risk, and a Stock portfolio can yield 8-10% with minimal risk and NO active participation, then to buy an operating business outright, the potential return must be FAR higher (thus the 33% expectation, returning 100% of the equity at risk within three years)...Bear in mind any prospective buyer can buy a NEW Curves franchise for about $28,000, and that whilst having "used" equipment reduces the value, if you have an established customer base that enhances it...Get out your books & do the numbers!Good luck!Source(s):http://www.buycurves.com/pricing/

Linus

I sold my Liquor/Wine outlet many years ago, and the accepted mark-up on that business was between 2 1/2 to 3 x Annual Net Profit.

Ask

insurance

Popular Q&A

What would lawyer costs for an auto insurance company be?
Some insurance companies consider a lawyer's fees the cost of doing business. So they don't really give that consideration when they value a claim.They also know that if you hire a lawyer and sue - you will have to pay your lawyer 1/2 of your settlement plus expenses - a smart adjuster will...

What do you think are the most annoying commercials out there?
I hate hearing the one that describe the side effects of the drugs they want everyone to ask for like you want them so bad because of the side effects. Are we that stupid?They think we are all morons!! NOTSource(s):Camille

How do I get him to pay for auto damages?
If you have proof that the other driver was cancelled (i.e., a letter from his company), you can claim under your Uninsured Motorist Property Damage coverage--it you carry it. Then your company can try to recover, but if they do, they won't pay you twice!An alternative is small claims court-...

Can you help me find a commercial auto insurance company?
Look, your attorney, who you're hiring, has connections to find someone who can do this.See, the vast, vast majority of people who think about doing this, can't afford it.If you came to ME asking for a quote, I'd charge you a $1,000 brokers fee for my time, because odds are very, very slim...

Is the auto-insurance claim information shared if I switch the insurance company?
Most of the time, yes they will find those prior claims.Many insurance companies participate in a national database that tracks claims. They will also check you MVR records of any tickets or accidents. It is very difficult to slip one past an insurance company.Fraudulently stating fewer claims...