We will use 10 percent for this example, although some consolidators are at the 7 to 8 percent level. This should approximate your last 3-year rate of growth in most cases. We will use 7 percent for sales and approximately 6.5 percent for cost of sales and overhead expense growth. For our example a rate of growth of 8 to 15 percent is a more likely consolidator target. For our example we will assume a modest 3 percent increase in vehicle population and in the income level of owners in that population.
Market share is the last factor.
If it is too low it is a problem, and if too high also a problem. For our example we will assume a 15 percent market share, which will have no direct impact up or down on the calculated value. More important than market share is the shop s present position with key DRP-focused insurers, such as Allstate, Farmers, and State Farm s Service First program. Buyers want shops with strong insurer relationships. The actual value of your business will then be determined through negotiation with a willing buyer.