Pricing: Business
Valuation and Pricing
Factors.
A helpful tool to add to
your business tool
box.
Many
owners have told us that a
very helpful step in making
the difficult decision
about selling is to obtain
a realistic expectation of
the sales price. For
example: if you found
out that your campground
business would sell for only
$125,000, you may not be a
very serious seller.
On the other hand, if you
found out that it would
sell in the $2 million
range ... You see what I
mean.
Unbiased
Opinion: In order to make an
intelligent decision
regarding pricing, you need
an unbiased opinion.
Although not a licensed appraiser, I have been exclusively brokering
campgrounds and RV parks for over 30 years and have been involved in over
300 RV park and
campground sales.
Consequently, I have
developed a keen insight
into the factors that
affect the price of RV park
businesses. We
know the campground industry well and have learned through experience
what it takes to sell and finance campgrounds and RV parks.
Based
on that knowledge we offer
campground owners our
written Business
Valuation and Pricing
Factors report. Business
Valuation and Pricing
Factors: You may
be familiar with the common
real estate approach to
valuation called a
Comparative Market
Analysis. This involves
looking at what has
recently sold and what is
currently on the market.
Our Business
Valuation includes this
approach, but also goes
several steps further by
looking at pricing from the
following 4 perspectives:
-
SOLD
Statistics. We apply our
database of "Sold
Statistics" to your
park.
Of course, no
two parks are alike,
but there are several
common denominators
such as gross income
multiplier, price per
site, and gross profit
multiplier.
These pricing
business formulas will
be applied to your park
with full explanations.
-
Income
Approach Method.
Our Income
Approach to valuation
involves making 7
adjustments to the
year-end statement and
tax return to better
estimate the actual
profit.
Once we have
established that, we
will then back into
several different
pricing packages to
demonstrate the
interaction of
downpayment and
financing terms and
their effect on the
final sales price.
This is the most
complex pricing
approach.
By sharing several
different pricing
examples, you will
learn how to custom
tailor a pricing
package to meet your
needs.
Obviously, you
don't want the
campground back once it
is sold.
Therefore, it is
important to price and
package the deal in
such a way as to
minimize the odds of a
default.
These examples
will help you
understand how to do
that.
We will also
look at an all-cash
sale versus a
combination of seller
and bank financing.
-
Recent
Campground Sales.
We will look
at recent park sales to
see how your park
compares.
We will provide
basic details that will
better allow you to
compare your park.
-
Parks
Currently for Sale.
Finally, we
will share basic
information about
campground businesses
that are on the market
now.
Buyers have
choices - let's look
at what your "competition" would
be if you put your park
on the market.
We will also
share our thoughts
about current market
conditions.
Our
basic fee for this written business valuation is $875 (more if you have a complex
business).
Depending on our
workload, it usually takes
approximately 4 weeks to
complete.
If
this interests you,
certainly give us a call.
If you decide you
would like to proceed with
our written report, we will
need:
-
Your
last 2 years' tax
returns (including
Depreciation Form
4562) and year-end
statements.
-
Pictures
of the campground
buildings and
campsites, including a site map,
brochure, rate sheet,
and anything else you
think would be
relevant.
-
A check for $875 (or if
you prefer,
MasterCard or Visa).
After
receiving the above
information, we will call
with questions in order to
be sure we have a thorough
understanding of the
business and together with
you, will work through the
various expense adjustments
that will need to be made.
In
our efforts to be truly
helpful to you, we feel it
is important to share with
you the factors involved in
determining a realistic
sales price that will bring
in qualified buyers and
result in a successful
sale, rather than just "hoping things work
out."
If
you have any questions,
give us a call at
828-452-1535.
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