How to value a one owner part time business?

[4570Man]

IMO a business that can’t continue running without the owner isn’t worth much. As in they usually get closed up and are worth nothing. A business that has employees and you can transfer ownership and things keep going along smoothly are worth something.

 

[Have tractor did travel]

He works 365 hours a year. At $70 an hour, that's $25,550. That means the business, over his labor cost, makes $30K a year. I agree with plowhog, so 3 x 30 = $90K for the business.

 

[plowhog]

IMO a business that can’t continue running without the owner isn’t worth much.

Raising the question: Are you buying a business, or buying a job?

 

[scaredychicken]

I'd really need to know what the $55 K is --- net income / net profit ? (says net profit) ... but how is that calculated by THEM? i'm not clear on what that actually means, and is it growing, stagnant, a blip ? what does the net profit look like year by year over the last 5+ years ? that would be more informative for sure

 

[4570Man]

Raising the question: Are you buying a business, or buying a job?

Exactly. If you wanted a job you could apply to any business in the entire country and collect the sign on bonus while you’re at it.

 

[RickB]

The challenge here is the list of transferable tangible assets is nonexistent.

 

[tallyho8]

It just seemed to me like there would be thousands (millions) of people who wouldn't mind working one extra hour a day for $55,000 a year clear profit. Sure they need a little training but even a burger flipper at McD's needs a little training. It could be done by a stay at home housewife in her spare time, a handicapped person, a retiree, a college student or a full time worker with another job.

He said his business started out very slow for the first 10 years but gradually built up as word of mouth got around about his product and for the last 30 years has been making about $1000 more each year except for last year which was a complete fluke when he made $70,000 probably because of all the people staying home.

He said he would guarantee the buyer would make $50,000 net profit (not counting income tax) the first year or pay him the difference but he couldn't make longer guarantees because he might not be alive any longer than that.

 

[tallyho8]

Exactly. If you wanted a job you could apply to any business in the entire country and collect the sign on bonus while you’re at it.

Yes but how many jobs will pay you $55,000 a year to work 7 hours a week?

 

[Cougsfan]

There are so many unknowns it what was presented that it is impossible to give an intelligent answer.

 

[MoKelly]

Yes but how many jobs will pay you $55,000 a year to work 7 hours a week?

Few jobs advertised on the front page of the newspaper.

But secret jobs, where you stay inside on the internet, never leave the house, the mailbox needs to be hidden from the house and secrecy is required so no one knows what you are doing and who the customers are —- well, perhaps quite a few.

But no one except a few folks getting ready to retire and sell know they exist.

MoKelly