We are in the process of negotiating to buy a child care business in NJ which has been in business for about 10 years, well run and has about 75 kids. The annual revenue is, say 750K with net profit being 250K. What should be our offer?
2006-09-20 04:50:54 · 4 answers · asked by Harry 3 in Business & Finance ➔ Small Business
Hi Edward,
Thanks for your feedback. Yes, we will be reviewing the financials. If everything is in order, then what should be the value ?
BTW, 10000 per child is reasonable in NJ.
2006-09-20 06:41:56 · update #1
In general you calculate the value of the business using the following formula:
(Net Profit * Index) + Real estate value + Equipment value + Inventory
Index is 2 for business that have personal working for the company.
Index is 1 for the sole owner operator.
Business appraiser can evaluate business much more accurate.
Sincerely,
Marina Lando
President
Business Loan Quest
http://www.blquest.biz
2006-09-20 08:07:40 · answer #1 · answered by Marina Lando at Harmony Life 2 · 1⤊ 0⤋
$10,000 per year, per child?
$933.00 per month, per child? 20-22 days?
$42-46 per day.
Net Profit=33% ? After all expenses?
Insurance, employees, food, etc?=$500,000.00
Those numbers sound unrealistic to me.
Been a long for time me, but is this what people are paying for child care?
I want to see records, P&L, and personal IRS tax returns for past 3-5 years.
2006-09-20 05:09:28 · answer #2 · answered by ed 7 · 1⤊ 0⤋
If you are going through a reputable business broker, it seems that you should already have an idea of what to offer.
2006-09-20 04:59:12 · answer #3 · answered by Anonymous · 0⤊ 0⤋
50k
2006-09-20 04:58:12 · answer #4 · answered by Anonymous · 0⤊ 0⤋