Whats your shop worth?

[Jeff Monson]

So how do you put a value on your shop? I'm being put in a position where I can buy out my partner, putting a dollar amount on

a shop seems like a hard thing to do. So if you guys were put in this position how would you come up with a value?

[xrac]

So how do you put a value on your shop? I'm being put in a position where I can buy out my partner, putting a dollar amount on a shop seems like a hard thing to do. So if you guys were put in this position how would you come up with a value?

 

You can hire an independent appraiser to place a valuation on it or you can hire two different appraisals and use an average of the two. You both could just agree on a price. I also have three different formulas which can be used to place a value on an automotive business. When I get home this evening I will post those formulas for you. They are on my computer there.

[xrac]

CALCULATION OF BUSINESS VALUE

 

METHOD #1

 

Calculation of Average Sales for most recent 4 years

Year Sales

2006 0

2007 0

2008 0

2009 0

Average 0

 

These averages sales are evaluated according to the following calculation criteria. You are given a high end and low end value to assign to sales. Select the number you feel most comfortable with. This is for the calculation of goodwill:

 

Calculation Criteria High End Low End

$350,000 $450,000 $0.30 0.20

$450,000 $550,000 $0.60 0.45

$550,000 $650,000 $0.90 0.65

$650,000 plus $1.00 0.75

 

Calculation of Goodwill (Multiply the Sales figure in each range by the end value number you select. These go where the zeros are. This is from a spreadsheet that I could not attach.) This is shown using high end valuation number.

 

Sales Range

$350,000 $450,000 $0 $0.30 $0

$450,000 $550,000 $0 $0.60 $0

$550,000 $650,000 $0 $0.90 $0

$650,000 $800,000 $0 $1.00 $0

Sum is total goodwill evaluation Sum

 

Value of Goodwill $0 (total of number above)

Book Value of Equipment $0

Value of Inventory at Cost $0

Appraised Value of Land $0

Appraised Value of Building $0

 

Total valuation $0

 

Supply the figures where there are zeros and add them all up to get a business evaluation.

 

If someone can tell me how to attach an Excel spread sheet I will do it for all three methods, or I will email it to somebody who can attach it , or send me an email address and I will email it to you personally. This is one method of three different evaluation methods that I have. Hopefully you can understand this

[Jeff Monson]

Thanks xrac, little confusing, could you email the spreadsheet to me?

 

[email protected]

 

 

Thanks a bunch.

Edited May 18, 2010 by Jeff Monson