What's a good price ?

[Einfach]

Hello, i'm new here and I'm actually negotiating with an owner to buy his carwash.

I need some help because i have no idea of the price, i mean i have but i need more.

First important point, i'm living and the carwash is in Switzerland. (The currency in this post will be CHF but i don't think that's very important)

The carwash has a sales revenue of 500k per year. The owner make arround 100k of cash-flow.

Second important point, the land is rented to the city.

Details : 6 bays self service (high pressure) + 8 vacuums

For you, with your experiences, what would be the price of this carwash ? I know you don't have so many information, but just to get an idea.

PS : the owner is selling because he is 85yo and lives far away of the carwash so it's time for him

 

[Roz]

Hello, i'm new here and I'm actually negotiating with an owner to buy his carwash.

I need some help because i have no idea of the price, i mean i have but i need more.

First important point, i'm living and the carwash is in Switzerland. (The currency in this post will be CHF but i don't think that's very important)

The carwash has a sales revenue of 500k per year. The owner make arround 100k of cash-flow.

Second important point, the land is rented to the city.

Details : 6 bays self service (high pressure) + 8 vacuums

For you, with your experiences, what would be the price of this carwash ? I know you don't have so many information, but just to get an idea.

PS : the owner is selling because he is 85yo and lives far away of the carwash so it's time for him

$500K for 6 SS bays, that is very good (almost amazing).
Keeping 20%, that seems very low but hard to say without seeing a P&L statement to see expenses in detail.
If all you are purchasing is the business, the equipment is in good condition, and you have a long term lease then most people would look to pay 3x cash flow......if I could commute I would consider the place as we always enjoy visiting Switzerland to hike and ski.

 

[Einfach]

$500K for 6 SS bays, that is very good (almost amazing).
Keeping 20%, that seems very low but hard to say without seeing a P&L statement to see expenses in detail.
If all you are purchasing is the business, the equipment is in good condition, and you have a long term lease then most people would look to pay 3x cash flow......if I could commute I would consider the place as we always enjoy visiting Switzerland to hike and ski.

Thank you for your answer !
Ok interesting, Yes the term lease is the biggest fear i have. For the moment the owner has a 1y contract (every December he sign a new one for 1y)
He has it since 1995 so it's ok bit we never know...

For the equipment it's quite new he just installed new machines.

You said keeping 20% is low, for you what would be a good pourcentage to keep ? Because on different websites it's what they say, 20% looks ok but i don't know.

 

[Roz]

Thank you for your answer !
Ok interesting, Yes the term lease is the biggest fear i have. For the moment the owner has a 1y contract (every December he sign a new one for 1y)
He has it since 1995 so it's ok bit we never know...

For the equipment it's quite new he just installed new machines.

You said keeping 20% is low, for you what would be a good pourcentage to keep ? Because on different websites it's what they say, 20% looks ok but i don't know.

It depends on the expense items and things may be different in your country. 20% would be fine if you have payroll for employees to run the place for you or if you pay yourself a salary. Impossible to say without details.

I would never sign a year to year lease. You may get surprised one year and they have you over a barrel as we say here. Too many unknowns in your description to be able to advise on a valuation.

 

[Einfach]

It depends on the expense items and things may be different in your country. 20% would be fine if you have payroll for employees to run the place for you or if you pay yourself a salary. Impossible to say without details.

I would never sign a year to year lease. You may get surprised one year and they have you over a barrel as we say here. Too many unknowns in your description to be able to advise on a valuation.

Oh yes, i always forgot but he has an employee. But i don't need him, i will do the work myself. So yeah probably more than 20%.

Also the owner just reworked everything inside for 300k everything is new...

The owner said 600k but he is waiting a new contract for the land. (I havn't replied to that)

i discussed with a guy helping companies to buy and sell. This guy told me 350k but honestly looks very low...

 

[Roz]

Oh yes, i always forgot but he has an employee. But i don't need him, i will do the work myself. So yeah probably more than 20%.

Also the owner just reworked everything inside for 300k everything is new...

The owner said 600k but he is waiting a new contract for the land. (I havn't replied to that)

i discussed with a guy helping companies to buy and sell. This guy told me 350k but honestly looks very low...

$350K is based on cash flow. If you get a lease you are comfortable with then factor in some of the improvements. Probably 2/3 but after seeing what was improved. That would get you to $550K close to his ask. The delta is negotiation

 

[Einfach]

Thanks a lot for your help. I keep you updated

 

[Roz]

If you close on the deal let us know where it is located. I travel to Europe often now to visit a kid there and for holidays. Only carwashes I have seen in various countries are the small IBA attached to a gas station. Would like to see this place that seems to be doing something right given the revenue. Good luck.