How do I pick an asking price for my repair shop?
An asking price that holds up starts with what the shop actually earns, what the building is worth on its own and what a buyer would need to make it work. Get those three numbers right and your price tells a story a buyer can follow.
If this sounds like youYou have a number in your head, but you're not sure if it's real. You don't want to price too low and leave money on the table, and you don't want to price too high and scare everyone away.
What you can do.
Start with the profit
Most shops are priced at two to four times the adjusted yearly profit. Adjusted means after paying yourself a fair owner's wage, with the building rent worked in.
Add the building separately
If you own the building, have it valued on its own as commercial property. Add that to the business value.
Check what sold nearby
A broker or business appraiser can show you comparable shop sales in Massachusetts or Connecticut.
Leave room to negotiate
Many owners price a little above what they'd accept, so there's room to move without walking away from money.
What to watch for.
- A price based on what you need to retire is not a business valuation. Buyers pay for earnings, not your plans.
- If you don't pay yourself a fair wage, profit looks higher than a buyer will accept. Adjust for it.
- Pricing too high and sitting on the market too long makes buyers wonder what's wrong with the shop.
Owner to owner, and it stays private.
Nicole is a CPA and James has run shops for nearly thirty years. We'll walk through how we see your numbers and what we'd offer, plainly, so you can take it to your own CPA and lawyer before you decide anything.
James StephensonLotus, Massachusetts and Connecticut
Quick answers.
How do buyers calculate what a shop is worth?
They look at the profit the shop makes after paying a fair owner wage, multiply it by a factor that reflects how steady and predictable the shop is, and add the building value separately.
Should I hire an appraiser before I set a price?
It can help, especially for the building. A business broker or accountant who knows shop sales can give you a range to work from.
What if my price and the buyer's offer are far apart?
Find out how they got their number. Sometimes the gap is in how profit is adjusted, and walking through it together closes it.
Thinking about what comes next for your shop or building?
Tell James a little about it. Only James reads it, and the conversation stays private. No pressure, no broker and no mailing list.