how to check a business worth

AbbieCadabra

zygurat789 wrote: »

People who think they're going to fail don't go into business.
Entreprenurs also fail sometimes. When you are selling a business with no premises or only short term you have an uphill job, security of tenure isuch more important than pessimism.

i agree on security of tenure if no actual premises, but only if there is a suitable break clause too.

we'll have to agree to disagree on the pessimism, i call it being a realist, but then again, what do i know, i've only been in business for 20 years

zygurat789

AbbieCadabra wrote: »

i agree on security of tenure if no actual premises, but only if there is a suitable break clause too.

we'll have to agree to disagree on the pessimism, i call it being a realist, but then again, what do i know, i've only been in business for 20 years

Were you involved in buying and selling businesses?

motorguy

zygurat789 wrote: »

I agree with all you say but you are introducing new parameters just to make your point.
You should stick to the original point, which was, in case you ave forgotten, goodwill.

They're not "new parameters" they are one of many reasons off-the-top-of-my-head that the O/P really needs to think through before they buy.

There is real risk here buying this business, and a big part of that payment is for "goodwill", which ultimately, could be worth nothing if your customer base goes elsewhere.

motorguy

zygurat789 wrote: »

Were you involved in buying and selling businesses?

I would suggest 20 years in business has led him to be extremely cautious before laying out his hard earned.

zygurat789

motorguy wrote: »

They're not "new parameters" they are one of many reasons off-the-top-of-my-head that the O/P really needs to think through before they buy.

There is real risk here buying this business, and a big part of that payment is for "goodwill", which ultimately, could be worth nothing if your customer base goes elsewhere.

Then you missed out
Third world war
Chips being banned as a health hazard
Ebola killing 100% of population of UK

It has nothing to do with the methodology of how goodwill is valued or the value of goodwill which is based on retrospective facts. Your fears are factors to take into account when you buy a business.

zygurat789

motorguy wrote: »

I would suggest 20 years in business has led him to be extremely cautious before laying out his hard earned.

I think you misunderstood AB's thinly veiled and blunt barb.

AbbieCadabra

zygurat789 wrote: »

Were you involved in buying and selling businesses?

no, never claimed to have any 'expertise' apart from my own dealings in renting various premises & the sad stories i've read on various forums of people desperately looking for ways out of a situation where they've tied themselves into a long lease with no idea of what they were doing.

as i already said, we'll have to agree to disagree on this one.

zygurat789

AbbieCadabra wrote: »

no, never claimed to have any 'expertise' apart from my own dealings in renting various premises & the sad stories i've read on various forums of people desperately looking for ways out of a situation where they've tied themselves into a long lease with no idea of what they were doing.

as i already said, we'll have to agree to disagree on this one.

You have read about the people who should never have gone into business in the first place or did it ill advisedly, anyone with the nouse to run a successful and ongoing business would also have the nouse to see that security of tenure, a place from which to carry on their business from, was very important which is why you will very rarely see the opposite.

MalcolmY

myright wrote: »

How much should an accountant charge to value it?

Accountants know sweet b*gger all about valuing businesses. For goodness sake, don't take their advice.