What is our B&B worth?
We run Bed and Breakfast from our home and have decided to sell. Our B&B is well run with a good reputation and website and we have plenty of bookings. How do we calculate the value of the business for a sale? L.D.
The value is best ascertained by contacting a specialist commercial estate agent who will know the answers to your questions and provide a correct value for your property depending on its location and similar businesses in the area. They may also be able to help with finding a buyer who wants to carry on the business.
Generally, the value is obtained by adding the value of the property to the annual profit of the business, but complications arise as sometimes it is only the annual profit that is taken into account and sometimes it is multiplied by a multiplier (two, three…). Goodwill is usually a sum that can be added to reflect the ‘marketability’ of the business, but in small businesses this is you, the owners. Once you leave it is difficult to maintain that the business has the same marketability.
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The information in this article is of general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case. No liability is accepted in respect of these articles. These articles are intended only as a general guide. Nothing herein constitutes actual financial advice.
