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Old 11-10-2012, 11:41 AM
32vld 32vld is offline
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Join Date: Feb 2011
Location: LI NY
Posts: 3,278
Quote:
Originally Posted by Dimple View Post
Not to sound condescending but I don't do work that way in my neck of the woods. I only contract on very rare occasion. Never had to because a handshake, smile and hard work keeps most of my customers returning year after year. And new jobs come in some too. That is why I wanted to address this to see what I'm worth here.

Thanks on the equipment answer, it helps.
Instead of condescending how about prodescending?

So you don't use contracts out in the sticks. Is that because the courts there have ruled that signing a contract with an X is not a valid binding legal document?

Well down in the big city, well outside to be slightly more exact, but not a lot more I don't use contracts either.

That is what makes your accounts not worth much. There is no loyalty on your customers parts for who ever buys your route.

Example you have 40 customers that gross $1,000 each a year so total income is $40,000.

So your business is worth $80,000 (equipment not included) because it will take two years to earn that money back.

Well half of your customers decide they don't like the buyer and take their business else where. Now the new owner will only gross $20,000. Then it will take him 4 years to earn the purchase price back.

Your business lost half of it's value because of ownership change. That is why without long term contracts your business can't be valued on full gross.

Do restaurants need contracts to get full value when the owner wants to sell?

No.

A good restaurant will have in one night more customers then a LCO will have in one year. Some customers that may be lost and with such a large customer pool they are of no importance to judge what a business is worth.

What is important that there are 10 years of IRS income to judge that restaurants worth.
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