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Lookin4Par
Colorado State Fan
Baton Rouge
Member since Jun 2012
889 posts

Any business brokers can help me with a question?

Trying to decipher a business listing on A brokerage website. Their business for sale listings have the asking price, revenue and cash flow on the listing. I am wondering what the cash flow means on these advertisements.

example:

convenience store
asking price: 975,000
Revenue: 1,300,000
cash flow: 360,000

This cash flow must mean the net profit right?







nolanola
Member since Nov 2010
5204 posts

re: Any business brokers can help me with a question?
Yes, typically cash flow would equal the owners take home before taxes. It may includes perks. For example the company made $330,000 and they added back $30,000 in things like travel, auto expenses, etc.


oldschoolgreats
LSU Fan
Member since Nov 2012
1700 posts

re: Any business brokers can help me with a question?
don't know anything about this type of business but almost a 38% return on investment. thats very, very, good. net cash flow is after financing cost (but before depreciation) so thats a positive. would you have to work at the store or are there expenses for management and operations. if you don't have to work every day then sounds like a solid idea to review further.


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RetiredG8tr
Florida Fan
Pensacola Fl 32503
Member since Nov 2012
44 posts

re: Any business brokers can help me with a question?
4Par,

You didn't post enough info. Is revenue net or gross. What is the percentage of gas revenue to inside sales revenue? A difference between a 35% gross margin and a very small gross margin.

I was in the business for many years from the position of a cooler boy to an executive with the largest chain. I would be happy to advise you concerning your due diligence. I did supervise stores in BR ( Plank Road & north) and Alexandria. I did the whole bang, locations, construction, staffing, and profitability. In the old days it was Pak-a-Sak, then sold to 7eleven.

If you want help, I'd be happy to talk to you.


Lookin4Par
Colorado State Fan
Baton Rouge
Member since Jun 2012
889 posts

re: Any business brokers can help me with a question?
Retired, The information that I posted was exactly what the business brokerage gave. I will have to sign a confidentiality agreement and disclose my financials in order to look at theirs. I will update if we go any further! Thank you.


Athanatos
Vanderbilt Fan
Baton Rouge
Member since Sep 2010
6782 posts
Online

re: Any business brokers can help me with a question?
Good deal of fail in this thread. I'll post if I get some time.


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RetiredG8tr
Florida Fan
Pensacola Fl 32503
Member since Nov 2012
44 posts

re: Any business brokers can help me with a question?
4par, The general rule was (70s-80s) one could expect inside sales for one month to equal yearly income for the owner. There are many factors though. When it comes to convenience stores I probably would only buy one from a private owner. Large chains sell losing/troubled locations for a discount just to get rid of them. Sometimes it can work to your advantage. Individual owners can do things chains can't..if you take my meaning.

Good Luck......


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jso0003
Auburn Fan
Birmingham/Atlanta
Member since Jun 2009
5168 posts

re: Any business brokers can help me with a question?
This doesn't pass the "too good to be true test"


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