Re: Sold small gym
As someone else said, sad day for the boards. I have always enjoyed reading your posts.
To give you some insight, I value businesses for a living and given the limited Information provided, I think you got a fair price. Probably could have gotten a bit more, but sometimes it's worth taking a little less to further your personal life and happiness. I have worked with valuing 3 separate crossfit affiliates over the past 18 months and it is always a fun process.
Please pm me if you are willing to share some more details of the transaction as it would benefit me greatly in my practice. All confidential of course.
If you (or anyone else) would like to discuss the way we value an affiliate, please don't hesitate to reach out. It is definitely a unique process since there is a very limited pool of buyers for an affiliate since someone would have to have their own affiliation that they would transfer the business into. This relates to what is commonly referred to as a discount for lack of marketability.
One of the main things that frequently gets overlooked are the wages that should be paid to an owner for their management responsibilities. This should really be subtracted for purposes of calculating owners profit that is capitalized (a multiplied to) when estimating a value. The whole idea is to apply the multiple to standalone business income that would exist if the owner was not involved in the business and paid employees to perform the ongoing responsibilities of the business.
Super interesting process that I would be happy to discuss in further detail if anyone is interested.