Is there a credible rule of thumb graph on the interweb that gives you a return on business investment.
ie if you buy a business valued at 1 million you can expect an approximate yearly return of say 80k or some such.
Please dont argue about those figures they were just plucked out of the air to illistrate what I was looking for.

Thank You.

PS I know this is a very complex area of financial machinations but I’m sure that any bank Loans Officer worth half their salt has a ready reckoner handy that tells them that Leroy and Mary Lou wont get a return of $8000 a week from the Fish & Chip shop they want a loan to buy.
Please understand that Leroy and Mary Lou are fictional characters made up to illistrate a point and also I’m not buying a Fish and Chip shop and neither are they.

Thank You Again.

Mr buffy says you should get 10% net return pa on your investment. Or better.

Leroy and Mary Lou would surely be more likely to open a fried chicken joint. Unless they lived in the swamps somewhere where they might offer catfish suppers with fries. But they wouldn’t call it fish & chips.

the problem is that when someone is trying to sell a business they cook the books to make it look much better on paper

an old trick is selling off stock and sacking people to show low labor costs, low stock that will attract ongoing tax – high levels of stock suggest that you aren’t moving the parts. also – there will be money in the bank account , the high levels of on hand money and lower costs thanks to less people will make it seem attractive.

someone looking at lending you money will look at the books and most likely compare it with known businesses in the same business. they’ll most likely look at the bricks and mortar value.

think of it this way

if a business was so successful – why would they be publicly looking for offers, wouldn’t family or friends get first pick before handing it open for public offers.?

its probably torching the place and collecting the insurance than bugger around trying to sell the business

Bubblecar said:

Leroy and Mary Lou would surely be more likely to open a fried chicken joint. Unless they lived in the swamps somewhere where they might offer catfish suppers with fries. But they wouldn’t call it fish & chips.

Why?

wookiemeister said:

the problem is that when someone is trying to sell a business they cook the books to make it look much better on paper

an old trick is selling off stock and sacking people to show low labor costs, low stock that will attract ongoing tax – high levels of stock suggest that you aren’t moving the parts. also – there will be money in the bank account , the high levels of on hand money and lower costs thanks to less people will make it seem attractive.

someone looking at lending you money will look at the books and most likely compare it with known businesses in the same business. they’ll most likely look at the bricks and mortar value.

think of it this way

if a business was so successful – why would they be publicly looking for offers, wouldn’t family or friends get first pick before handing it open for public offers.?

its probably torching the place and collecting the insurance than bugger around trying to sell the business

if i were a bank lending you a million dollars to buy the business i would be inclined to take a look at the business and look for incongruity, i don’t believe that you can tell a companies worth on paper.

Peak Warming Man said:

Is there a credible rule of thumb graph on the interweb that gives you a return on business investment.
ie if you buy a business valued at 1 million you can expect an approximate yearly return of say 80k or some such.
Please dont argue about those figures they were just plucked out of the air to illistrate what I was looking for.

Thank You.

PS I know this is a very complex area of financial machinations but I’m sure that any bank Loans Officer worth half their salt has a ready reckoner handy that tells them that Leroy and Mary Lou wont get a return of $8000 a week from the Fish & Chip shop they want a loan to buy.
Please understand that Leroy and Mary Lou are fictional characters made up to illistrate a point and also I’m not buying a Fish and Chip shop and neither are they.

Thank You Again.

A lot of people buy a business with the intention of selling it later for a profit, so the annual income isn’t such an important part of the equation.

Though the market for speculators has taken a hit in the last 5 years.

Perhaps you’d want to try a serve of of Mary and Leroy’s fish and chips first.

Neophyte said:

Perhaps you’d want to try a serve of of Mary and Leroy’s fish and chips first.

Especially if it was LEEEEEERRROOOOOOYYY JJJEEEEENNNKKIIIIINNNSSS!!!! shop.

They would charge a lot.

the sure way of making money in large businesses is to sell shares in the business

you pump your wages up beforehand and cook the books a bit to show how useful you are and get all your mates into high paid positions

then you keep selling shares and make some bullshit up about how great business is – you could have some big advertising campaign and open up heaps of outlets or similar. you also take huge loans so you can pump your wages to an amazing amount.

at the height of the whole thing you leave and find other employment citing your amazing management skills. of curse things can’t stay this way, the business isn’t sustainable. maybe a year or so later the business collapses under a huge debt and restructuring happens.

Who buys shares in fish & chip shops?

Divine Angel said:

Who buys shares in fish & chip shops?

Bill Gates.

Divine Angel said:

Who buys shares in fish & chip shops?

well i think fish and chip shop is just an example

if you want to waste a lot of money and lose a lot of money then buy a restaurant or some “cafe”

Neophyte said:

Perhaps you’d want to try a serve of of Mary and Leroy’s fish and chips first.

If I know Mary Lou and Leroy they’ll probably use some endangered catfish from a busted arsed African country that they buy from an oily haired thin lipped beady eyed Lebanese bloke and use reconstituted chips.

Little Billy Gates started off with a hot dog stand, then rapidly went on to become the richest man in the solar system. I read it about it in an email. Since then, he’s always been eager to help kids like PWM who are flipping their first burgers or deep-frying their first dim-sims.

Peak Warming Man said:

Neophyte said:

Perhaps you’d want to try a serve of of Mary and Leroy’s fish and chips first.

If I know Mary Lou and Leroy they’ll probably use some endangered catfish from a busted arsed African country that they buy from an oily haired thin lipped beady eyed Lebanese bloke and use reconstituted chips.

fish and chip shops typically use the cheapest ingredients

you get nasty oil being used

>>fish and chip shops typically use the cheapest ingredients
you get nasty oil being used

Thanks for that.
I’ll probably be using Mr Buffy’s answer though.

Deep-fried taipan and chips. I can see it becoming a global tourist draw.

Bubblecar said:

Deep-fried taipan and chips. I can see it becoming a global tourist draw.

Or Taipan, fish and a milkshake.

It’s a bit like reef&beef, except that its snake&flake&shake.

Take a break for a snake, shake and flake.

Mmmm…. fish and chips…

I’ll have to start ordering some of that Chimay beer.

Carmen_Sandiego said:

Mmmm…. fish and chips…

Lucky the fish is a different colour from the chips, or it would just blend in. :/

There is a fish and chip shop in town here that operates a few nights a week. It used to be a cafe, but that went broke and the owner if off working in the mines trying to pay off his losses. Meanwhile, his Mum runs the fish and chip thing to try to make a few bob as they still have to shell out for the lease until it runs out.

On the menu is fried mars bars.

morrie said:

There is a fish and chip shop in town here that operates a few nights a week. It used to be a cafe, but that went broke and the owner if off working in the mines trying to pay off his losses. Meanwhile, his Mum runs the fish and chip thing to try to make a few bob as they still have to shell out for the lease until it runs out.

Lots of that going on around here too.

Kingy said:

morrie said:

There is a fish and chip shop in town here that operates a few nights a week. It used to be a cafe, but that went broke and the owner if off working in the mines trying to pay off his losses. Meanwhile, his Mum runs the fish and chip thing to try to make a few bob as they still have to shell out for the lease until it runs out.

Lots of that going on around here too.

I had the most expensive fish and chips evah in a shop near you. I think we might have spent $60 for the two of us. It was ok, but not worth that much.

Being a fish and chip shop most of your money will not be on the books.

I no longer live walking distance from Melbourne’s best fish and chips :-(

Do any fish and chip shops still have pinball or Space Invader machines?

They’d rake in something, surely…

Neophyte said:

Do any fish and chip shops still have pinball or Space Invader machines?

They’d rake in something, surely…

That is a damn good idea.

You’d get older folk with the nostalgia angle, and the younger ones would be intrigued by the analogue technology

Speaking of batter, time for some pancakes with lime juice and sugar. NOMNOMNOM

A tops business would be storage parks or car parks. After the outlay very little overheads and in the case of the storage parks they can even auction defaulters storage to recoup costs.

And storage parks are usually out in industrial estates so cheaper rates.

morrie said:

Kingy said:

morrie said:

There is a fish and chip shop in town here that operates a few nights a week. It used to be a cafe, but that went broke and the owner if off working in the mines trying to pay off his losses. Meanwhile, his Mum runs the fish and chip thing to try to make a few bob as they still have to shell out for the lease until it runs out.

Lots of that going on around here too.

I had the most expensive fish and chips evah in a shop near you. I think we might have spent $60 for the two of us. It was ok, but not worth that much.

But it takes a lot of work to harvest the lips of that many squid…

The concept of return on investment for a small business is very similar to that used to make decisions for large business. The ‘rule of thumb’ is that the expected return should be greater than what you can return on a less risky investment. In the case of small business I would expect the benchmark to be about 4% or 5% (the standard term deposit rate).

But having said that many small business enterprises are fairly risky endeavors so I’d be wanting a hell of a lot more out than that; probably around the 10% to 15% mark.

I am craving fish’n‘chips. Fresh fish’n‘chips.

*drools on keyboard *

One gets the impression that there aren’t a lot of fish and chip shops in the US – is this in fact the case?

Neophyte said:

One gets the impression that there aren’t a lot of fish and chip shops in the US – is this in fact the case?

Well, not in the middle of the desert. We have a fast food place called – wait for it……Long John Silver’s. It’s shite.