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How do I set a selling price for my thriving franchised tanning salon??

I am looking to possibly sell my thriving franchised tanning salon. We have been profitable since we opened the doors 3 1/2 years ago with minimal marketing or advertising. We have grown sales every year. Great busy corner location in women's lifestyle shopping center. This year we became debt free! How do I come up with a sales price to see if it is worth while to sell for a profit or hang on since the business is performing well. Thanks for your help in advance! jww

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Answers (4)
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Yes that is what I have heard take 3 times your profit (cashflow) but to also factor in the equipment as well somehow. We are just over $300k in sales and have trended positively every year.

Oct 8, 2010
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Biz2Credit LLC
New York County, NY

Jamie,

Biz2Credit (www.biz2credit.com) helps in valuation of deals as part of financing deals. Normally one takes 3 years of financial and profits.

Oct 7, 2010
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The BAF Group LLC
MD

Cash Flow is the key. Whether it is a multiple of Cash Flow - not Sales - or some other method, Cash Flow is definitely something that is crucial, in most small businesses. And multiples frequently break down. For one thing, depending upon the method of membership, the multiples can go up or down from the norm. The size of your Revenue can make an impact, as well. There is no quick way to do it, without seeing the books. Anything you learn from the Community can be helpful, but should not be "taken to the bank", because without a full analysis, you could end up with a large, large margin of error.

Oct 7, 2010
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multiple of sales? Last years total sales? Last year's profit? Just need a little help on to come up with a number! thanks

Oct 7, 2010

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