How to value a restaurant or price restaurants using valuation and appraisal principles for $1,000 to $2,000

Valuation and Appraisal is Our Full Time Business

How to Value a Toronto Restaurant
Generally $1,000 to $2,000
Call for exact pricing for your situation.


Eric Jordan, President
Free consultation.
Call or email now!

1-800-606-0310
eric@pin.ca

How to value a Toronto restaurant; the valuation or appraisal is a process.  Once we have all of the information we need, via the intake conference, your valuation report will be delivered to you in approximately two business days. We refer to our evaluation as a Value Statement.
WE COME AT THIS FROM FOUR DISTINCT VIEWPOINTS:

EXISTING ACCOUNTING:

The view from an accounting perspective; relying on the the numbers created by the clients' existing accountant, then finding the real "normalized net income" through a proprietary process.

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Changes have been made to the Municipal Code Chapter 19, the by-law which governs the establishment and operation of Business Improvement Areas in Toronto. In July 2011, Toronto City Council adopted amendments regarding starting a BIA, the BIA polling processes, proxy voting, board eligibility and board governance Business Improvement Areas are encouraged to keep on top of changes in the by-laws, regulations, urban design issues and other items of interest affecting their operations.

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http://www.toronto.ca/toronto_facts/business_econdev.htm
http://www.merriam-webster.com/dictionary/valuation
http://www.ecosystemvaluation.org/
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/valuation/val.htm?ref=Guzels.TV
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http://bioscience-valuation.com/
https://www.nationwideappraisals.com/
http://www.lakelandcollege.ca/academics/business/.../appraisal-assessment/
http://www.accuval.net/services/appraisals/stock-valuation.php
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RISK:
Looking from the insurance viewpoint and assessing risk to buyer.

HUMAN CAPITAL:
From the point of view of a resume broker; assessing the value of the
human capital involved in the business.


INTELLECTUAL PROPERTY AND PROPRIETARY PROCESSES:
Understanding, assessing and estimating the intellectual property and proprietary knowledge that is transferred with the business.  Change of ownership and management does matter.
INTAKE CONFERENCE:
This is a 2 to 3 hour conference call that can include as many stakeholders as required.
As no two restaurant businesses are the same, the questions will vary.
Below is a list of some of the areas that we will cover.

(1) Why: What is the purpose of the valuation?

(2) Who: Value with whom owning and managing the restaurant?

  • Your current value with current ownership and management?
  • Value with a new restaurant owner with less experience?
  • Value with buyer like you with similar restaurant management experience?
  • Value with an upscale buyer who has the financial ability to build on what you have accomplished in your restaurant business?
  • These WHO questions make a huge difference to the final appraisal.

(3) Normalized Net Income: I must understand what questions to ask to be able to determine the real 'Normalized Net Income.' This figure is seldom what you see in your year-end accounting, which is generally calculated to determine the lowest amount of tax legally payable.

  • Owners and families are often overpaid or underpaid depending upon individual tax situations.
  • What would the owner have to pay someone to fill his/her position in the restaurant?
  • There are about twenty more normalizing questions that must be answered and these can be different depending upon the answers given to previous questions. This is where experience counts.

(4) Leasehold Improvements: These need to be covered regardless of whether the building is leased or owned.
It is important that the right questions are asked in any comprehensive appraisal.

(5) Hard Assets: Determining fair market value.
Book value means nothing if we want to know the true value of the restaurant business.

  • Restaurant Equipment
  • Restaurant Inventory

(6) Intellectual Property: Copyright, Proprietary Processes, Business Operation Manuals. These are your operating manuals; the step by step instructions on how to run your business and how to train others to operate your business. This greatly affects value; positively if it you have them and negatively if you donít have them, and much more negative if it would not be possible for you to have a practical manual that would allow for your business to continue if you were unable to function.

(7) Value of Cash Flow: This is calculated by finding the normalized net income then multiplying it by a ratio determined by risk, opportunity, and the intellectual property affecting the means to produce.

(8) Soft Assets: Do you have intellectual property that has fair market cash value outside of your business?

(9) Risk: What are the possible risks to your restaurant?
No appraisal can be completed without properly understanding risk.

(8) Value of Cash Flow: This is calculated by finding the normalized net income then multiplying it by a ratio determined by risk, opportunity, and the intellectual property affecting the means to produce the cash flow.

Depending upon the complexity of your business, you can expect 48 hours to get a report back to you.

As you can well understand, no computer program, gross sales or other rule of thumb guessing techniques are going to be helpful for you in determining the real value of your restaurant. In fact, these techniques could harm you. Valuation and appraisal is our full time business. We do a lot of restaurant valuations and other business valuations.


How to Value a Toronto Restaurant
Generally $1,000 to $2,000
Call for exact pricing for your situation.


Eric Jordan, President
Free consultation.
Call or email now!

1-800-606-0310
eric@pin.ca


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How to value a Toronto restaurant or price restaurants in Toronto using valuation and appraisal principles for $1,000 to $2,000


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