Dana, Excellent point on what it should be worth vs. what she probably thinks it is worth.
Jim >From: "Jim Faughn" <jfau...@socket.net> lets agree on 25,000 per year. Next, given the best financial >advice I've read and heard, you would figure that you should only plan >on your investment's in the near future earning between 6 & 7%. So what >figure would it take to earn 25,000 per year? I come up with about >$420,000I wouldn't pay anywhere near that much money for the business. >I don't have the numbers that were offered but I hope this puts what I >would think would be her point out for others to consider. Without getting into a complicated business valuation analysis, here is the take. For business valuation, where inventory is not a factor, a pretty standard ballpark figure is 2.5 x previous 5 year average net income with any deviation percentage as a factor. $25K x 2.5 plus inventory and negotiable goodwill. If you can't amortize the purchase price over 10 years, forget it. Nice thought, but she has been approached previously. If she doesn't watch it, she will end up with nothing. What a shame. As Jim said, I value some of my KR friends as true friends!! I would like to see this airplane prosper.
