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Valuing a Coffee Shop


Valuing a business often confuses everyone involved, however there is a simple approach to what is generally taking into account.

You can break it down into two parts = Earning Potential & Equipment Value

So long as you have your lease setup correctly and you can prove your financials, you can then work out what that income stream is worth.

Profit = How much money is left over at the end, after everyone else is paid.

The first step is to work out what the net profit is after rent, outgoings, wages and salaries, cost of goods, expenses, fees etc. The next step is to annualise the amount which means to find out what the profit is for a year.

This annualised profit amount is then multiplied by a magic number. This number is called the multiple and differs from business to business.  It means how long the buyer wants to get their money back from the business.


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1 commentaire


Archie
Archie
02 oct. 2023

This article provides a comprehensive guide on how business brokers value a coffee shop, offering valuable insights and practical tips for coffee shop owners and potential buyers alike, making it an essential resource in the industry.

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