A few general questions when trying to evaluate the purchasing of a brewery/ brew pub that is operational in its current state.
Beyond looking at discounted cash flow and NPV or basic asset evaluation, what other factors should a prospective buyer evaluate or value in the total price or sale?
1.Would the buyer factor this lease terms into the final offer? My thought here is basically add up the remaining cost of property lease and use this as a part of a discounted gross value due to the fact that the seller would be absolved of the remaining terms of the lease?
2. One lingering question is does the buyer value/factor in the sweat equity that built up the brewery?
3. What if the build out was actually being valued by the seller at contract labor at retail rates/ prices Should this be discounted to a lower $$$ figure say sweat equity rate/history or do you not even value the physical labor that went in to the build out and just focus in on the total value of assets alone?
4. Also, with the discounted cash-flow analysis how can one arrive at a usable discount rate (no other local brewery sales, bond and stock market etc)
5. I have heard a few on this board say you pay nothing for good will, which in this instance is defined as branding(if you are not keeping the brand), clientele, and build out. What might the thoughts be now?
All help is greatly appreciated
thank you in advance
Zoob
Beyond looking at discounted cash flow and NPV or basic asset evaluation, what other factors should a prospective buyer evaluate or value in the total price or sale?
1.Would the buyer factor this lease terms into the final offer? My thought here is basically add up the remaining cost of property lease and use this as a part of a discounted gross value due to the fact that the seller would be absolved of the remaining terms of the lease?
2. One lingering question is does the buyer value/factor in the sweat equity that built up the brewery?
3. What if the build out was actually being valued by the seller at contract labor at retail rates/ prices Should this be discounted to a lower $$$ figure say sweat equity rate/history or do you not even value the physical labor that went in to the build out and just focus in on the total value of assets alone?
4. Also, with the discounted cash-flow analysis how can one arrive at a usable discount rate (no other local brewery sales, bond and stock market etc)
5. I have heard a few on this board say you pay nothing for good will, which in this instance is defined as branding(if you are not keeping the brand), clientele, and build out. What might the thoughts be now?
All help is greatly appreciated
thank you in advance
Zoob
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