Assets to consider when buying a business
Time equals money and when you are buying or opening a business you are very short on time so many tasks that you might be able to accomplish yourself you have to outsource to professionals or hire an employee in house. The following are some items to consider
Mailing List/ email list value
Website Value– The cost to make such a website, its SEO search engine optimization, Ranking in google, various google, yelp and other sites reviews
Social media presence and setup with various ordering platform and reviews
Value of current customer base (Even if the business is losing money)
Equipment Value
Inventory Value
Exterior sign value
Employees Trained and in place value
Liquor license/ lotto – It is quicker to buy a licensed business and transfer the licenses than to apply for a new business.
Net present value of the company’s earnings less a reasonable salary for the owner that is also a manager (which may vary from one buyer to another depending upon their job opportunities).
Under value lease: Many times the rents in the area have increased with inflation and due to an increasingly population, therefore it is important to compare rent and terms of the lease against comparable properties in the area. Then perform a net present value calculation for difference between current leases that are being offered and the lease to the premises being sold to derive a dollar amount of this asset.
Renovation Value (including the cost and owners time for architectural drawings, building permits, renovations, builders risk insurance rent during the renovation period)
Call Thomas McGovern, MBA, CVA for a free consultation if you are thinking of buying or selling a business in New York City, NYC or the following areas:
Nassau County
Queens county
Kings County (Brooklyn)