Listing ID: 84090
This is an absentee owner shop with low overhead, located in a densely populated area on a busy road. Sales $8000 / week, rent $1600/mo. (no triple net), asking $139,000 with half down
- Asking Price: $139,000
- Cash Flow: N/A
- Gross Revenue: $416,000
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
1300 sq.ft store located ii a strip plaza with ample parking.
Why is the Current Owner Selling The Business?
There are all sorts of reasons why individuals resolve to sell businesses. Nonetheless, the true reason vs the one they say to you may be 2 completely different things. As an example, they might state "I have too many various responsibilities" or "I am retiring". For numerous sellers, these reasons stand. But also, for some, these may just be excuses to try to conceal the reality of altering demographics, increased competition, recent reduction in profits, or an array of various other reasons. This is why it is really important that you not rely entirely on a seller's word, but rather, use the seller's answer in conjunction with your general due diligence. This will paint a much more sensible picture of the business's current scenario.
Existing Debts and Future Obligations
If the current business is in debt, which lots of businesses are, then you will certainly have reason to consider this when valuating/preparing your offer. Numerous operating businesses borrow money in order to cover items like inventory, payroll, accounts payable, etc. Keep in mind that in some cases this can imply that profit margins are too small. Numerous companies fall into a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may additionally be future obligations to think about. There might be an outstanding lease on tools or the structure where the business resides. The business might have existing contracts with suppliers that have to be satisfied or might result in fines if terminated early.
Understanding the Customer Base, Competition and Area Demographics
Exactly how do businesses in the location attract brand-new clients? Many times, companies have repeat clients, which form the core of their everyday revenues. Specific elements such as new competitors sprouting up around the location, roadway construction, and also personnel turn over can affect repeat consumers as well as adversely impact future incomes. One crucial thing to take into consideration is the area of the business. Is it in a very trafficked shopping center, or is it hidden from the main road? Undoubtedly, the more individuals that see the business regularly, the higher the possibility to build a returning consumer base. A final thought is the general area demographics. Is the business situated in a largely inhabited city, or is it located on the outside border of town? How might the local typical household earnings effect future income potential?