The 2016 Business Reference Guide -
The Essential Guide to Pricing a Business
by Tom West - Copyright 2016, 832 pages, paperback
The most extensive and complete source of business buying and selling information and data on the market today! Includes over 2,800 valuation "rules of thumb," tips and benchmarks for more than 700 different businesses.
Use this book to learn how to estimate a quick rule-of-thumb business valuation estimate for over 700 different types of businesses, provided by hundreds of active business brokers from all around the United States. The absolute best and most unique book of its kind on the market today! Its over 800 pages are packed with valuable pricing information based on actual transactions for business buyers, sellers, brokers, accountants/CPAs , attorneys, bankers and consultants.
This very latest 26th edition of this extremely popular business buying and selling resource is now available.
Table of Contents and Example
The 2016 Business Reference Guide, now in its 26th year, is the essential guide to pricing businesses. This year, the entire Guide832 pagesis devoted to the latest Rules of Thumb and up-to-date pricing information for hundreds of different businesses. Most business entries include:
- Rules of Thumb based on sales, earnings and other factors
- Pricing tips from many industry experts and business brokers
- Extensive benchmark information that provides comparison data
- Ratings based on several factors that can assist you in deriving a multiplier (not all ratings contain all factors):
° Amount of Risk
° Industry Trend
° Historical Profit Trend
° Ease of Replication
° Location & Facilities
The Reference Guide also includes:
- Industry ResourcesAssociations, Publicationsall with Web information
- General Information providing industry data, surveys & comments
- Fascinating facts about many different businesses and industries
- A complete listing of Business Brokerage Press’s Industry Experts for 2016
- Index for easy access to specific information
- The many different types of businesses covered are arranged alphabetically for even faster location of information
Thousands of readers call the Business Reference Guide “an absolute necessity
invaluable to anyone involved in the valuation of a privately held business.”
Here’s one Example of a typical business entry to give you an idea of what to expect for hundreds of different businesses (some entries are multi-page):
Marinas and Boat Dealers
SIC: 4493-06 NAIC: 713930 Approx. 6,000 businesses with this SIC
Pricing Rule of Thumb: 10 times EBITDA. Discussion: The price of waterfront land greatly skews the multiples for a marina which are generally 10 or more times EBITA. Another handy rule of thumb is that the slip rental income should cover the debt service which allows the business to earn from other activities at the marina. A marina is usually a conglomerate of several businesses (slip rental, service, sales, gasoline, brokerage, restaurant, etc.)
Pricing Tips: Rules of thumb for this type of business are complicated because a marina is a combination of many profit centers; berth rentals, boat services, new and/or used boat sales, restaurant/canteens, and fuel sales. As far as the marina part is concerned the income from the slip rentals must be enough to service the debt. The owner's profit will come from the ancillary businesses mentioned above. Fuel sales can also be a positive factor because the markup (and resulting profit) is usually quite high.
Industry Experts’ Ratings: Marketability (1-4)…1.2 (low marketability), Industry Trend (1-4)…1.2 (declining trend), Ease of Replication (1-4)…3.6 (difficult to replicate). Marina businesses are very difficult to start from scratch because of the price of waterfront property and the very difficult permitting process (significant environmental issues). The has caused the price of existing marinas to trend up while profits trend down. Of course, this negatively affects marketability of the business. In some parts of the country developers are buying marinas with the idea of building home condos on the waterfront complete with their own boat slips. The marketing situation for marinas varies by region and whether the marina is on fresh or salt water.
Benchmarks: Expenses as a percentage of sales: Cost of Goods Sold (35%), Payroll/Labor (20-25%), Occupancy Costs (35-40$), Profit (10% of Gross Sales)….etc.
General Information (provided by several specific business broker's with marina sales experience):
1. Some marinas are sold as leased property i.e., business/marina operations only. Unless the cash flow is good the real value is in the real estate. Be sure to consider the impact of the cost of floor-planning each model year.
2. Beware of a marina selling new boats with a large floor plan. This is a very tough business and typically the only ones making any money are the people flooring the inventory.
3. Be careful if a restaurant is involved. This is an entirely different and sometimes financially dangerous business. It is always better if the restauant is leased to a professional restauanteur. Environmental issues are always at the top of the list of concerns for marinas.
Business Advantages: Owner’s lifestyle Business Disadvantages: Low profitability
Seller Financing: Typically 20 years
1. International Marina Institute (imimarina.com)
2. Financial & Operational Benchmaring Study for Marina Operators from imimarina.com
3. Valuation of Marinas published by The Appraisal Institute (appraisalinstitute.org)
About the Author
Mr. Tom West is the publisher/editor of "The Business Broker" newsletter and the author of "The Resource Handbook for Business Brokers and Intermediaries" and the "Complete Guide to Business Brokerage". He is a founder, past president, and former executive director of the International Business Brokers Association (IBBA). He is a frequent lecturer and seminar leader. Mr. West is probably the most knowledgeable individual in the country today concerning the issues of buying or selling small to mid-sized businesses.
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