When selling your supermarket, the first step you’d like to take is to have your business appraised correctly. Assumptions on value without professional guidance may lead to a wrong appraisal that will affect your business decision and judgement.
The Commonwealth Bank of Australia recognises that while there are several formulas that can be used “there are no black-and-white answers on valuation techniques. It’s important to conduct your own research, then get independent advice from a business valuer or broker.”
Factors Affecting Market Appraisal
Aussie Supermarket Brokers (ASB) is a group of business brokers specialising in supermarket buying and selling. As such, many supermarket owners trust and recommend ASB for their solid experience and top notch service delivery. There are several factors that ASB takes into consideration when appraising your supermarket value:
- Annual Turnover – The record of this turnover helps determine the current status of the supermarket business.
- Net / Gross Profit – A high net profit that comes with a high gross profit means that the business has an efficient financial system and work flow.
- Income Statement History – An increasing gross profit in the income statement history means that the supermarket business is growing. Thus, making its market value higher.
- Return of Investment – This factor will be determined by reviewing the income statement history and the current gross profit of the supermarket business.
- Plant and Equipment – State-of the-art plant and equipment for supermarket business can add to its market value.
- Rent/Lease Contract – A long lease contract is more preferable than a short one. A long lease will contribute to higher market value.
Comparative Market Analysis
To place the pricing on a more comprehensive view, ASB prepares a Comparative Market Analysis (CMA). This is an examination of the prices at which similar properties in the same area have recently sold.
Getting a CMA has many advantages for supermarket businesses. It ensures that the supermarket owner’s hard work and effort is not short-changed by considering all factors in assessment. Supermarket owners will also gain confidence about the current market value of the supermarket business and have supporting evidence to justify the asking price. The CMA also aids prospective buyers towards making a favourable decision.
How Much is your Supermarket Worth?
A correct market appraisal for your supermarket business that comes from business brokers specialising on supermarket sales is your first step when you’re planning to sell your supermarket. Do you want to know the status of your supermarket in the business cycle? Book your free market appraisal with Aussie Supermarket Brokers today!