[thecrone]

My employer has offered me and my son a chance to buy her business. It's a commercial cleaning service that brings in aprox $15,500 a month. She wants payments of 7000 a month to be taken off the top of the profits. I'll be paying this for 5 years. There is no building in the sale, only existing supplies (vac's, cleansers etc.) There is a very good client list that I've been working for several months. My son and I only get 300 to 5oo a month at this time after all bills are paid. We are working long hard hours 7 days a week and have not had a single day off since last Nov. We are exhausted and discouraged. What do your experts think we should be paying for this business? Should we just cut our losses and bail? Please help. Thank you.

[viking]

Your question is rather complex. In a nutshell, it is not a good deal.

Have you paid her any cash? If not then it sounds like you should cut your losses and head for the hills or try to negotiate better terms with your employer. Perhaps you aren't reigning in expenses as tightly as you can?

I would first try to negotiate a better deal with her in the short term and then I would work on making the business more efficient and increase the customer base through effective marketing.

Good luck.

[tariqz]

I want to buy middle level hotel/motel,is it twice the sales revenue.how we determine the prices

[AK lawyer]

i want to buy middle level hotel/motel,is it twice the sales revenue.how we determine the prices

No.

First, it's not a good idea to add your question onto an old thread.

And especially in this case. Appraising value of real estate such as a hotel or motel is not done in the same way evaluating the purchase price of a service business such as is the question in the earlier posts.

One way to appraise a hotel or motel would be to compare it with similar sales of such properties in the same general area. The second way would be to determine how much it would cost to replace it. And the third way is the way you ask: to figure it on the basis of projected income.

One inexpensive idea to get a rough idea of what the property might be worth is to see what it's assessed for property tax purposes. Be aware, however, that tax appraisals can, depending on your area, be way off.

But you would be foolish to do this without professional help, including an experienced real estate attorney. And pay the money to get an appraisal done.