gavinb Senior Member Joined: 12 Jan 2006 Posts: 1 Location: Calgary Expertise: I love coffee
Posted Thu Jan 12, 2006, 1:53pm Subject: Valuing an existing business
New to the forum. Apologies if the post isn't appropriate or in the wrong spot. Did seem like there was alot of expertise here.
I'm currently looking at buying an existing coffee shop. Been around for a few years, does reasonable volume and turns an okay profit. Lease is good and sale is conditional on renegotiating a longer lease term. Staff in place and manager wishes to stay so all in all a pretty sweet little business.
With some new energy in the business I can see turning up the numbers a bit. What I'm really interested in is some professional opinions on valuation. What, typically, does a coffee shop sell for? This one is listed at approximately 3 times earnings which seems reasonable. Any opinions on this? I can understand that there are 101 other variables to consider but am really interested in quick rules of thumb on the valuation process.
Posted Fri Jan 13, 2006, 10:48am Subject: Re: Valuing an existing business
3 times earnings? That seems a little high. Is that the net profit after everything is paid in the year, or is it the gross sales? I've looked into buying a variety of coffeeshops here in Calgary and I can't think of any that were selling for more than the gross sales... they were all equal to or less than. However, net profit... there was one that had a net profit of negative $17000 per year and was selling for $120000. The rest were around double the net profit.
Symbols: = New Posts since your last visit = No New Posts since last visit = Newest post
Forum Rules: No profanity, illegal acts or personal attacks will be tolerated in these discussion boards. No commercial posting of any nature will be tolerated; only private sales by private individuals, in the "Buy and Sell" forum. No cross posting allowed - do not post your topic to more than one forum, nor repost a topic to the same forum. Who Can Read The Forum? Anyone can read posts in these discussion boards. Who Can Post New Topics? Any registered CoffeeGeek member can post new topics. Who Can Post Replies? Any registered CoffeeGeek member can post replies. Can Photos be posted? Anyone can post photos in their new topics or replies. Who can change or delete posts? Any CoffeeGeek member can edit their own posts. Only moderators can delete posts. Probationary Period: If you are a new signup for CoffeeGeek, you cannot promote, endorse, criticise or otherwise post an unsolicited endorsement for any company, product or service in your first five postings.