CBV
11th January 2008, 18:45
My business is a leased retail shop, three year renewable lease, easy rental, good premises and landlord, no worries there, and online sales. Own website. Just a vague picure here: 14 years established, Web sales on the up and up, shop sales, surprisingy, growing year on year. We make a custom product in the arts field.
We google mostly number one for our targetted keywords, no pay per click, basic natural search rank, and PR3. secondary location, well known locally, good reputation.
Here's the rub - due to serious and unexpected illness last year we got into a bit of trouble with HMRC, although that is all sorted out and behind us now, its still a skeleton in the closet. eg. I would not be interested in a business that appeared not to be able to pay its VAT, so how much has this "blip" devalued the previous 14 years hard work?
And a fly in the ointment - they may be building in the adjacent empty building.... in the long run this will create more shops, but there will clearly be a dip whilst this work is going on as far as shop counter takings go.
I appreciate that these figures are hardly "dragons den" material :( but its an interesting job, specialised, and could be run by a husband/wife team, on easy hours. Unfortunately my wife has become seriously ill and I'm looking into the possibility of selling off one half of the business to keep the manageable (single handed) other half (website) and take it up a gear.
So I would like to have a rough estimate of how to value both halves, and the combined business. For convenience I would let one half (probably the shop side) go for a token payment, for the convenience, so as to move to an industrial unit with a trade counter.
How does it work these days? Leaving aside local factors, what are the basics for valuing a retail business, a web business, and a business that incorporates both. Is there a formula based on turnover/profit etc? SAV? Equipment? What value goodwill (what on earth is goodwill!)
We google mostly number one for our targetted keywords, no pay per click, basic natural search rank, and PR3. secondary location, well known locally, good reputation.
Here's the rub - due to serious and unexpected illness last year we got into a bit of trouble with HMRC, although that is all sorted out and behind us now, its still a skeleton in the closet. eg. I would not be interested in a business that appeared not to be able to pay its VAT, so how much has this "blip" devalued the previous 14 years hard work?
And a fly in the ointment - they may be building in the adjacent empty building.... in the long run this will create more shops, but there will clearly be a dip whilst this work is going on as far as shop counter takings go.
I appreciate that these figures are hardly "dragons den" material :( but its an interesting job, specialised, and could be run by a husband/wife team, on easy hours. Unfortunately my wife has become seriously ill and I'm looking into the possibility of selling off one half of the business to keep the manageable (single handed) other half (website) and take it up a gear.
So I would like to have a rough estimate of how to value both halves, and the combined business. For convenience I would let one half (probably the shop side) go for a token payment, for the convenience, so as to move to an industrial unit with a trade counter.
How does it work these days? Leaving aside local factors, what are the basics for valuing a retail business, a web business, and a business that incorporates both. Is there a formula based on turnover/profit etc? SAV? Equipment? What value goodwill (what on earth is goodwill!)