The organization that acquires the business then leases the use of the real-estate for a specified period of time at an agreed price. This enables the current owner to realize continuing income from their property. The spray booth, a downdraft, has a considerable useful life remaining. Pulling, and particularly measuring, equipment needs updating. Repair volume has remained stable throughout the past few years, indicating a stable, satisfied customer base.
Local demographics indicate a relatively young, prosperous population.
Utilization is approximately 75 percent compared to the purchaser's existing business. Given these factors, this facility could justify valuation based upon financial performance instead of strictly asset value. With proper transition from the present management, the customer base can be maintained, greatly reducing a potential risk of the business purchase. However, if sales were shrinking, the local population older, or other problems existed, the valuation would be weighted to fair market value of the assets. Remember, the strategies outlined in this article are only tools for approximating the value of a business.