View Full Version : How to value an existing limo business?
June 12th, 2001, 04:23 PM
I'm interested in getting into the industry. When looking at existing limo businesses for sale, I am finding that it is nearly impossible to verify "cash flow" numbers due to the "cash" nature of the business. How do you value an existing limo business?
June 13th, 2001, 01:43 AM
It's simple if the cash wasn't reported it cannot be verified. You only pay for what they can prove and that was deposited in the bank.
June 15th, 2001, 02:57 AM
I agree. I would only pay for what they can prove. Usually when someone sells the business it's the cost of the assets plus 1-3 years of it's gross earnings...depending on how well the client base is, etc.. Or mabye someone is looking just to get rid of their assets and that's it.
June 21st, 2001, 03:28 PM
Listen to this one real carefully... I do know something about this issue...
If you want to look at an existing company you need to check out the owner first, then any staff such as phone operators and management, if any. Then check the real books... ask for years of credit card transaction information... get all the monthly and daily credit card company reports. Ask for bank statements... check out how much certain clients spend per year and look and see if there are any heavy hitters... which usually tells you that the company has some good "rich folks," if you know what I mean. If they spend $5000.00 every time they come in town and only come in twice each year... and have been around for a few years... that is like finding GOLD! The more the better!!!
How much is the monthly outgoing versus the monthly inflow? How are the Chauffeurs handled... pay...subcontracting? Really dig deep. If there service is good the Chauffeurs are likely to be making some good $$$ tip money $$$ and that is where the good guys lean towards.
Advertsing? Where is it and why is it there... do you need more and can you deal with less? Should you target new areas that need to be hit and how much will that cost?
BOY!!! I could go on and on... you guys help this person out please!
I can be reached at firstname.lastname@example.org if you need anything. Remember that you wanted this business... get ready for the real thing, if you haven't been there before!!! 24-7-365
CEO and Founder, LIMO LIMO USA