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ELEMENTS OF AN ESTABLISHED BUSINESS
(Factors contributing to the value of a business)

  • Earnings – Net profits, usable cash flow.

  • Assets – Furniture, Fixtures and Equipment (FF&E) plus Inventory.

  • Return on Investment – ratio of earnings to investment.

  • Operating Cost – percentage that is fixed and variable.

  • Owner’s Benefits – the perks of ownership.

  • Established Customers - and proven consistent revenue.

  • Predictability – of future business and growth rate.

  • Established Suppliers and Credit Lines.

  • Established Operating and Accounting Procedures.

  • Goodwill, History and Reputation.

  • Appeal of the Business.

  • Potential for Growth.

  • Ease of Operation.

  • Risk of losses through exposure to liability claims.

  • Knowledgeable Employees.

  • Proven Location.

  • Stability of the Lease - and ease of assigning the lease.

  • Special Technology or Trade Secrets.

  • Seller’s commitment to provide training to the buyer.

  • Seller’s agreement to sign a Non-Compete Agreement.

  • Accurate and Verifiable Records.

  • Ability to obtain third party financing.

  • Assumable or owner financing available.

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