Grimsweeper Posted October 29, 2015 Share Posted October 29, 2015 Hi all, First of all glad we're back even if momentarily. For those of you that don't know I have my own accounts that I've located myself and have purchased a couple with and without machines on site, mostly of my own discretion in valuing their worth. I have an established vendor in my area that is leaving the business and seeking off his locations and equipment. His basic formula for valuing the locations are $500 per machine + 1/2 the gross annual sales. Example - 2 Pop 1 snack with $2000 gross annual sales. Selling price - $2,500. Pay no attention to the gross sales it's just an example for simple math. Obviously there are variables that affect a locations value, some may be worth more while others are worth less under these guidelines but this seems like a very fair pricing arrangement. Your thoughts? Link to comment Share on other sites More sharing options...
matthew0582 Posted October 29, 2015 Share Posted October 29, 2015 f Link to comment Share on other sites More sharing options...
RJT Posted November 1, 2015 Share Posted November 1, 2015 In your scenario I would say yes if he had like new equipment (1 year or less old) but usually that is not the case. Their are way to many variables in play to give some magic formula for every situation. Here are just a few examples of what can come into play. New equipment but low performing account "Newish" equipment and average revenue Older equipment and strong revenue Junk equipment and good revenue Junk equipment and bad revenue and the list goes on and on as far as different scenarios as to the value of an account. Each account has to be accessed then are their any other assets included like trucks, spare parts, money handling equipment, moving equipment, etc, etc and then put a final value on a "route" or company Link to comment Share on other sites More sharing options...
Grimsweeper Posted November 1, 2015 Author Share Posted November 1, 2015 In your scenario I would say yes if he had like new equipment (1 year or less old) but usually that is not the case. Their are way to many variables in play to give some magic formula for every situation. Here are just a few examples of what can come into play. New equipment but low performing account "Newish" equipment and average revenue Older equipment and strong revenue Junk equipment and good revenue Junk equipment and bad revenue and the list goes on and on as far as different scenarios as to the value of an account. Each account has to be accessed then are their any other assets included like trucks, spare parts, money handling equipment, moving equipment, etc, etc and then put a final value on a "route" or company I agree on many variables but 1 year old or less on the equipment is setting a pretty high expectation for $500 per machine. At that price the sales data could suck and still come out ok if the equipment is decent don't you think? We're talking about full size Royals, DN, and USI snack machines. Link to comment Share on other sites More sharing options...
RJT Posted November 2, 2015 Share Posted November 2, 2015 I agree on many variables but 1 year old or less on the equipment is setting a pretty high expectation for $500 per machine. At that price the sales data could suck and still come out ok if the equipment is decent don't you think? We're talking about full size Royals, DN, and USI snack machines. Maybe I didn't word it the best but I think you see my points. That's why I gave so many example variables. It is hard to say without knowing exactly make and model of machines, account revenue, etc. If the account is new equipment but low performing then you are essentially buying equipment but then you have the cost of buying, finding a a better location to put them in and moving the machines, etc. You or someone is going to have to go through each account and equipment piece by piece and assign a value to get a total. Link to comment Share on other sites More sharing options...
RJT Posted November 2, 2015 Share Posted November 2, 2015 What is the total gross revenue per year and the total number of machines? This is the first place to start to see if you are buying an actual profitable company or just buying assets. Link to comment Share on other sites More sharing options...
mfdbackdraft Posted November 11, 2015 Share Posted November 11, 2015 I'm not a big player so I can keep each account location seperate to see sales, and to show the value of the location to a prospective buyer. Ask for revenue history going back as far as possible. I've had a site that was a 2x/week soda fill go to a 1x/month... its a electronics recycling business that has seen a huge downturn and therefore a decrease in employees. Do your homework. Stop back at a prospective location and try to talk to the employees there. Link to comment Share on other sites More sharing options...
RJT Posted November 11, 2015 Share Posted November 11, 2015 I'm not a big player so I can keep each account location seperate to see sales, and to show the value of the location to a prospective buyer. Ask for revenue history going back as far as possible. I've had a site that was a 2x/week soda fill go to a 1x/month... its a electronics recycling business that has seen a huge downturn and therefore a decrease in employees. Do your homework. Stop back at a prospective location and try to talk to the employees there. Most sellers are not going to let you talk with anyone at the location. Link to comment Share on other sites More sharing options...
Grimsweeper Posted November 12, 2015 Author Share Posted November 12, 2015 I ended up buying 2 locations - one with a USI drink and USI snack, both in great shape. And a decent 660 Royal on the other. There's advantages and disadvantages to both locations but overall I feel they were priced very well and service easily for me. Great opportunity for me to grow a little more at my own pace with little effort. Link to comment Share on other sites More sharing options...
TKK Posted November 12, 2015 Share Posted November 12, 2015 Let us know on the revenues Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.