Listing ID: 84105
This is a huge moneymaker! The shop is famous for roast beef sandwiches, it is located in an affluent coastal town. It closes at 9pm and delivery is only 15 to 20 % of sales. Rent $3600 includes tripe net, sales $115,000. /mo., asking $575,000 with$200,000 down
- Asking Price: $575,000
- Cash Flow: $480,000
- Gross Revenue: $1,380,000
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
1300 sq. ft. store located in a mix use building
Why is the Current Owner Selling The Business?
There are all types of reasons why people decide to sell operating businesses. Nevertheless, the genuine reason vs the one they say to you might be 2 entirely different things. As an example, they might state "I have too many various commitments" or "I am retiring". For lots of sellers, these factors are valid. But, for some, these might simply be reasons to try to hide the reality of changing demographics, increased competitors, recent reduction in profits, or a variety of other reasons. This is why it is extremely important that you not count totally on a seller's word, yet instead, utilize the seller's answer together with your general due diligence. This will repaint an extra realistic picture of the business's current circumstance.
Existing Debts and Future Obligations
If the existing company is in debt, which many businesses are, then you will certainly have reason to consider this when valuating/preparing your offer. Numerous companies take out loans with the purpose of covering things like inventory, payroll, accounts payable, etc. Bear in mind that in some cases this can indicate that profit margins are too thin. Lots of businesses come under a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may additionally be future obligations to think about. There may be an outstanding lease on tools or the building where the business resides. The business might have existing agreements with vendors that should be met or might cause charges if canceled early.
Understanding the Customer Base, Competition and Area Demographics
How do operating businesses in the area draw in new consumers? Often times, businesses have repeat consumers, which develop the core of their everyday earnings. Particular elements such as new competitors growing up around the area, road building, and employee turn over can influence repeat clients as well as negatively influence future earnings. One vital point to consider is the placement of the business. Is it in a very trafficked shopping center, or is it concealed from the highway? Certainly, the more people that see the business on a regular basis, the greater the chance to build a returning customer base. A final thought is the basic location demographics. Is the business located in a densely inhabited city, or is it situated on the edge of town? Just how might the neighborhood mean household earnings influence future income potential?