Valuing a business

[Coin Operated Group]

Anyone have any formulas or experience when it comes to valuing a business?

I know people say its worth what someone wants to pay, but was after some calculations if possible.

If you have sold a business or bought a business how did you value it? Doesn't have to be a vending business.

Also how do you value your assets if there are showing as less than value on books?

Matt

[Acecombat]

i'm not 100% sure, but I have heard it is your net profits over a year x 3 or 5 so if your in profits by £1000 in the first year it may be worth £3000-5000 plus 50% of your asset worth, but as I say not 100% sure

[Snackmore]

In that case given your previous posts Matt I will triple your paper value and offer you £6000 for your busines!!!!

[Coin Operated Group]

Hmm, let me think about that one steve.

How can you value on net when you don't make a net and you have 100k in assets ?

[alexlg]

I'd be interested to know exactly how fellow vending operators value their time spent operating their business? I don't take an hourly/monthly wage out of my business but I haven't even been doing this long enough to do a proper tax return (1st one due by end of Jan 2015!) so I still have a lot to learn. At the moment my 'earnings' are: takings - costs.

Presumably, when 'valuing' your business its really important to ensure the 'net' profit is AFTER the cost of your time. E.g. a property business turning over £3k/month, hopefully with minimal work time input, will be valued very differently from a vending business turning over £3k/month. (obviously time is only one of many differences between these two examples- other considerable ones might be levels of borrowing and assets)

[Style]

As a business a vending round is worth peanuts compared to the income. I havent seen rounds sell for any more than £150 per machine. i have sites that make me that much in a month! lol

[part-time-operator]

you have to account for the time you spend on it. I treat it as not much more than minimum wage as you are really doing multi-drop delivery work. compare it to the wages that larger vending operators pay to their staff. so yes, you should really value rounds after your time but most don't.

i've bought and sold rounds for more than £150 a machine, i don't think that makes me a mug. like you say, some sites can make a lot of money. If a site is going to earn you a couple of grand in a year I think it's worth paying for, just be sure that it really will. So far I've never lost money on a round that i've bought but I'll admit some have taken longer than others to recover the initial outlay. As long you as you don't lose the sites and buy it cheap enough you can't really ever lose money.

and also, I think most rounds that sell are ex-franchises where the majority of sites are absolutely worthless so they only sell for the value of the equipment + stock...at least that's how I think of them when I've made offers.

[Style]

I've seen a couple of people state they are earning poorly an hour. I don't know your business but I think you may be visiting your machines too often or are not taking advantage of sites you can develop to multi machines. I reckon my average earnings for a 9-4 day are around £200. I have earnt over £500 in a day. Its all about smart management of your machines and sites.

[Mark@YorVend]

I've seen a couple of people state they are earning poorly an hour. I don't know your business but I think you may be visiting your machines too often or are not taking advantage of sites you can develop to multi machines. I reckon my average earnings for a 9-4 day are around £200. I have earnt over £500 in a day. Its all about smart management of your machines and sites.

Yeah I usually get round about 15-25 sites in a full day and net about £250 - £350 profit from that, and I'm on a bike!!

If I had a van I could get round 40 or so in a day and would make about £500 - £600 profit, minus £30 for fuel.

[alexlg]

As a business a vending round is worth peanuts compared to the income. I havent seen rounds sell for any more than £150 per machine. i have sites that make me that much in a month! lol

When you say 'make me more than that', are you saying you have sites which NET you more than £150/month? I reckon my 'net' is only about 20% so do you really have sites which sell more than £750/month? WOW! Lucky you. Nice work if you can get it!