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Is this business a good buy?
Posted on 1/22/24 at 2:41 pm
Posted on 1/22/24 at 2:41 pm
The business is a well established fuel, tire, and minor repair shop. It comes with property, building, tanks, equipment, prepaid insurance, cash on hand, etc. It is clearing $130,000 a year with very little hustle. Everything is paid off as this business has been around for 50 plus years. Everything is in good shape. The asking price is right at a million dollars. Thanks.
9
Posted on 1/22/24 at 2:43 pm to Churchill
is the owner in the business every day hustling or is it self sufficient? is the owner also getting a salary or is he getting paid the 130k?
This post was edited on 1/22/24 at 2:45 pm
Posted on 1/22/24 at 3:25 pm to Churchill
Would you be managing this place? Does the $130k include any salary paid to the owner?
7.6x earnings for an auto service shop seems high to me
7.6x earnings for an auto service shop seems high to me
Posted on 1/22/24 at 4:10 pm to Churchill
I assume the fuel tanks are in ground. When were they last replaced? And max 3X
Posted on 1/22/24 at 5:38 pm to Churchill
You should try to value the individual components on your own or with a professional. What’s the business worth? What about inventory? Property/real estate?
Cash on hand obviously shouldn’t get any multiplier, but the rest can be valued to come up with a true price where you can judge the sale price fairly.
Cash on hand obviously shouldn’t get any multiplier, but the rest can be valued to come up with a true price where you can judge the sale price fairly.
This post was edited on 1/22/24 at 5:38 pm
Posted on 1/22/24 at 6:49 pm to Churchill
There is usually an earnings "multiple" that is the average/standard for every business/business segment for sales pricing. I'd track the multiple down for that type of business. A business broker can probably help you with that. I have no idea what the margins are to arrive and the $130k, so I'm of no help. Is the $130k NOI, EBITDA?
Posted on 1/22/24 at 6:55 pm to Churchill
If the building / land is worth 600k or more this might be a decent deal.
Remember you need to pay the debt out of that $130k
Remember you need to pay the debt out of that $130k
Posted on 1/23/24 at 5:28 am to Churchill
If you take out a loan for a million dollars, how much of that 130k is left after you pay your note
You may be paying 1 million dollars for a 50k/year job
You may be paying 1 million dollars for a 50k/year job
Posted on 1/23/24 at 11:25 am to Churchill
quote:
The business is a well established fuel, tire, and minor repair shop. It comes with property, building, tanks, equipment, prepaid insurance, cash on hand, etc. It is clearing $130,000 a year
Others have asked you pertinent questions already. The ask is high based on net. I'll go ahead and ask, but I assume the $130k is net - after taxes too?
I'd also like to know what the gross is yearly. $130k net on $500k would be great, but $130k on $1M, not so much.
quote:
Everything is paid off as this business has been around for 50 plus years. Everything is in good shape.
As others have said, the a majority of the value of the business could be the real estate involved.
Posted on 1/24/24 at 2:45 pm to Churchill
Unless the dirt under the property is worth a ton the answer is no with 80K coming off fuel this is way too expensive and risky. I have m and a background.
Walk away. Better businesses to be in.
Walk away. Better businesses to be in.
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