jimbo Posted February 5, 2014 Share Posted February 5, 2014 Hi, I need help to value a route. Is there a industry standard formula? Its 561 stops, single head gb, avg gross per stop $14.25 monthly, total expenses run 22%. thanks, Jimbo Link to comment Share on other sites More sharing options...
sherlock Posted February 5, 2014 Share Posted February 5, 2014 No standard formula, but experienced vendors can give you some ballpark figures with some more details. What kind of equipment and how old is it? Is this a charity or commission route? Is the route concentrated in one general area or spread throughout a few counties? How long has the route been established? What is the asking price and why is it being sold? What proof can the seller provide to verify the $14.25 gross avg? There are probably more details that would be helpful, hopefully others can chime in so that you can get a decent idea of value. Link to comment Share on other sites More sharing options...
Action Vending Posted February 5, 2014 Share Posted February 5, 2014 what kind of machines? Link to comment Share on other sites More sharing options...
havending Posted February 5, 2014 Share Posted February 5, 2014 Hi, I need help to value a route. Is there a industry standard formula? Its 561 stops, single head gb, avg gross per stop $14.25 monthly, total expenses run 22%. thanks, Jimbo The standard is to low ball the heck out of the offer and almost steal the route. Most bulk guys don't really know how to value a business. Link to comment Share on other sites More sharing options...
FrCorey Posted February 6, 2014 Share Posted February 6, 2014 depends on equipment too. a route of a name brand is worth more then a route of chinese plastic. Link to comment Share on other sites More sharing options...
sweetstop Posted February 6, 2014 Share Posted February 6, 2014 I have bought several routes and knowing how to value a route/business is very different from what you offer. I always give the seller the benefit of the dought to be able to prove income etc. they never can hence the low ball offers. some you get some you dont. Link to comment Share on other sites More sharing options...
jimbo Posted March 3, 2014 Author Share Posted March 3, 2014 No standard formula, but experienced vendors can give you some ballpark figures with some more details. What kind of equipment and how old is it? Is this a charity or commission route? Is the route concentrated in one general area or spread throughout a few counties? How long has the route been established? What is the asking price and why is it being sold? What proof can the seller provide to verify the $14.25 gross avg? There are probably more details that would be helpful, hopefully others can chime in so that you can get a decent idea of value. route is 13years old. most locations are over 2 years old machines are oak 3-450 & nw60's 5-13 years old routes are located within 200 mile proof well thats always sketchy with a route but there are sales tax returns, though items sold are exempt from tax. there are also p&ls. thought there may be a formula for machines and then for sales jimbo Link to comment Share on other sites More sharing options...
musser Posted March 3, 2014 Share Posted March 3, 2014 I have a formula I use for valuing routes that has worked well for quite awhile. But, most people find fault with something so simple. So.. First you need a verifiable income figure. If that is not available walk away, NO MATTER WHAT the seller says, if the income cannot be verified the investment you make is no more than a very risky gamble, you could lose it all. If you can get a verifiable number you next need to figure out what it will cost you to do this business. It can be hard to do but it is critical to your success or failure. The bottom line is that the route must generate enough money to: pay operating costs ( product, commissions if any, travel costs, repairs etc), have enough money left over to pay the note ( if you finance through the seller) or repay your investment if you used your own money, contribute to a "depreciation fund" because the machines are already old and will be needing refurbishing or replacement over the next 5 years or so, pay you what you time is worth do do all the work. I have known some very nice people that lost a great deal of money by buying "blue sky". Dont be a victim. Link to comment Share on other sites More sharing options...
Rick Posted March 3, 2014 Share Posted March 3, 2014 My valuation of the route is $41,570 or 8 months net. I arrived at that number by estimating expenses at 35% which I'd wager is closer to TRUE total expenses than the 22% quoted. That being said, there's a true value and a fat wad of cash in hand value. Sellers react differently to cash. Sometimes it affords you a 10% discount, sometimes it's a 50% discount. Assuming all information provided is verified and since I'm spending your money jimbo; I'd start at $20,000 and pay $35,000 straight cash. Link to comment Share on other sites More sharing options...
musser Posted March 4, 2014 Share Posted March 4, 2014 Rick your number is pretty close to what I was thinking. Link to comment Share on other sites More sharing options...
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