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Valuing an Amusement Vending Business


bardovending

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Anything under a 24 month return on my money is in my opinion a decent return. So if the owners of the route have paperwork/tax returns to back up a $12,000 purchase price for example, I wouldn't pay more than $24,000 for that route. Other factors including age of equipment comes into play, distance from my home base ex ex... These are just guidelines I use for the MAX offer I would be prepared to make. Obviously, the more motivated they are, the cheaper you will get it increasing your return. And I always start my offers LOW and creep up. I bought a route where the guy was asking $75K (3 month ROI) and I got him down to $45K.

 

Other times routes are just priced to go right out of the gate but, this is rare. 

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Search the topic.  This comes up on a weekly basis. My general rule of thumb is about about 10-20% the cost of the equipment new plus about 4 months of gross sales. Everyone has their own matrix. That's a very complicated question to ask.   BOTTOM LINE, can you trust the fellow you're dealing with? VERIFY, VERIFY, AND VERIFY.  Visit every location if you're serious. If he doesn't want to do that, tell him to hit the road. 

 

Numbers and tax sheets talk, bull crap walks.  And there is plenty of people out there waiting to take your dough.  Be careful, consistent and very thorough and you'll find the number you're looking for. 

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  • 2 weeks later...

I say run away.

 

Coinop amusement is a dying industry.

 

Today everybody caries a touch screen computer in their pocket.

 

Revenues are falling every year.

 

In the 80s a new game would come out every few weeks. Now days I see one or 2 new thinks a year.

 

Who wants to play 20 year old games?

 

Keeping an amusement route is all about personal connections between you and the bar owners.

 

Often when you lose that connection about 30% will leave within the first year.

 

About the only thing that is still earning is cranes and redemption. But they are not pure amusement about 30% of the time you are dispensing a product.  

 

 

Walta

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