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What is the Value of Your Dealership?
When wondering "how to put a value" on your dealership, we hope your first thought is to call NBB. However, your first thought might be to contact your CPA, who will probably recommend ordering an appraisal. But what kind of appraisal will you get? What method will the appraiser use on your dealership? Appraisals tend to settle around three methods: (a) Cost or Asset-Based Approach,
(b) Income Based Approach and (c) Market Approach
Income approach - The appraiser will estimate the dealership value based on its ability to generate income. But wait a minute! What if the dealership is not being run to its true potential? And even worse, what if the dealership is losing money? How do you multiply losses to arrive at a positive value....?
Dealerships that lose millions of dollars can sell for millions of dollars! After all, it is a franchised business with territorial protection - that has value! And RMV's experience has taught us how to calculate it.
Market approach- The market approach is based in part on third-party, verifiable transactions. The vast majority of transactions are not published; therefore, your appraiser will be forced to compare your dealership to similar dealerships, which are publicly traded. Such an approach will inevitably ignore the unique circumstances or operating environment of your dealership, and will definitely overlook the hidden value that your (unique) dealership possesses.
When RMV calculates the Realistic Market Value of a dealership, we take into consideration over 50 factors that can impact value. Additionally, RMV's sister company, National Business Brokers, Inc. has sold over 500 new car dealerships, this allows RMV to data mine all the information necessary to provide valid comparisons. No other company or appraisal firm can make this claim.
To get the True Blue Sky value of your dealership, contact me today.
Warm Regards,
Brady Schmidt
President
National Business Brokers, Inc.
e: brady@nationalbusinessbrokers.com
t: (949) 770-7451
f: (949) 770-1965
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National Business Brokers, All rights reserved. License Number: 00658687
8105 Irvine Center Drive, Suite 900. — Irvine, CA 92618 — Tel: 800.576.9875; 949.770.7451 — Fax: 949.770.1965
info@nationalbusinessbrokers.com |
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