Blue Sky is the intrinsic value of an automobile dealership, over and above the value of its tangible assets. It is sometimes equated to the goodwill of a car dealership.
Most articles regarding the blue sky value of new car dealerships cite a multiple of earnings formula, such as three times earnings, four times earnings, and so forth. The idea that “blue-sky” can be determined by anything times anything is just plain wrong.
Even NADA the Car Dealerships in the Strangest Places Ford F-150 XLT Ridgeland WI 54763 National Automobile Dealers Association in its publication entitled “A Dealer Guide to Valuing an Automobile Dealership, NADA June 1995, Revised July 2000 bemuses, in part, with respect to valuing a dealership by using a multiple of earnings: A Rule of Thumb valuation is more properly referred to as a “greater fool theory.” “It is not valuation theory, however.”
In its Update 2004, NADA omitted its reference to “fool”, but referred to the multiple formula as Ford F-150 XLT Ridgeland WI 54763 rarely based upon sound economic or valuation theory, and went on to state: “If you are a seller and the rule of thumb produces a high value, then this is not a matter of great concern. Go for it, and maybe someone will be stupid enough to pay you a very high value.”
A dealership’s blue sky is based upon what a buyer thinks it can produce in net profit. If potential buyers think it Benefits of Buying From Used Car Dealerships Ford F-150 XLT Ridgeland WI 54763 cannot produce a profit, the store will not sell. If it can produce a profit, then variables such as desirability of location, the balance the brand will bring to other existing franchises owned, whether or not the factory will require facility upgrades, and so on and so forth, determine whether or not a buyer will buy that particular brand, in that particular location, at that particular time.
I have been consulting with dealers for nearly Ford F-150 XLT Ridgeland WI 54763 four decades and have participated in over 1,000 automotive transactions ranging from $100,000 to over $100,000,000 and have never seen the price of a dealership sale determined by any multiple of earnings unless and until all of the above factors have been considered and the buyer then decided he, she or it was willing to spend “x” times what the buyer thought the dealership would earn, in order to purchase the business opportunity.
To think Ford F-150 XLT Ridgeland WI 54763 otherwise would be to subscribe to the theories that (1) even though you think a dealership could make a million dollars, the store is worth zero blue sky because it made no money last year; and (2) if a store has been making $5 million per year you should pay say 3 times $5 million as blue sky even though you think you will not produce that kind of profit. Both propositions are absurd. Ford F-150 XLT Ridgeland WI 54763 If a buyer does not think a dealership is worth blue sky, then what he is really saying is that he sees no business opportunity in the purchase and therefore, in my opinion, he should not buy the store.
Each dealership is unique with respect to its potential, location, balance that its brand brings a dealer group, and condition of facility. The sale is also unique with respect to whether it is a forced liquidation, Ford F-150 XLT Ridgeland WI 54763 orderly liquidation, arms length, insider, or a case where an anxious buyer is trying to induce an unwilling seller. There are management factors to consider, length and term of leases, possibilities or non-possibilities of purchasing the facilities and whether or not the factory wants to relocate the store or to open a new store up the street.
In the car business it is impossible to pick a dealership or a franchise out of a hat, Ford F-150 XLT Ridgeland WI 54763 multiply its earnings by some mystical number and predict either what the dealership is worth, or what price it would sell for – and it doesn’t matter if you are talking about a Toyota, Honda, Ford, Chevrolet, Chrysler, Dodge, or any other dealership. At any given time one franchise might be considered more or less desirable than another, but they are all valued in the same manner.
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Ridgeland, WI (54763) Hourly Weather
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STATE OF WISCONSIN CIRCUIT COURT DUNN COUNTY BRANCH 1 NOTICE OF SHERIFF SALE
Peter Jon Clemetson a/k/a Peter Clemetson E6232 County Road V Ridgeland, WI 54763 Defendant Delaina J. Clemetson a/lc/a Delaina Clemetson E6232 County Road V Ridgeland, WI 54763 Defendant Red Cedar Medical Center 2321 Stout Road Menomonie, WI 54751 ...
NO. 4468 N14735 490th St, Ridgeland $383,600. (Farm ... Rassbach Realty LLC NO. 4428 BOYCEVILLE, WI (3) BR RANCH STYLE HOME for sale at 322 Nordveien Dr. Open concept w/vaulted ceilings, hardwood floors, large kitchen w/island, custom oak cabinetry ...
28-Year-Old Man Dies After Crash in Wisconsin's St. Croix County
The driver of the truck, 41-year-old Chad J. Bowers of Ridgeland, Wisconsin, was not believed to have been injured. Initial observations at the scene indicated Fellman was not wearing a seatbelt at the time of the crash. Bowers was believed to have been ...
DON'T STOP: Ridgeland cheer leader rocks the rain delay
It's Friday night. You're a cheerleader, your team is on the road, and you're facing a weather delay. That's when Ridgeland High School cheerleader Shelby Clemons took matters into her own hands, singing karoke style to the 1980's anthem "Don't Stop ...
Rev. Gregg Harold Bitter
Gregg, the oldest of 5 children, was born to Rev. Robert and Janeth Bitter in Neillsville, WI on April 26th ... 1 Corinthians 13:12 Published in Fond du Lac Reporter on Aug. 17, 2016
Mayville polka season to be closed with dairy, The Ridgeland Dutchmen
The Ridgeland Dutchmen Band now includes the father-son duo of ... In November of 1998, the band was named co-winners of the Horizon Award from the Wisconsin Polka Hall of Fame. More recently, in 2003, they were named Band of the Year.
Wisconsin company recalls chicken over disinfectant concerns
RIDGELAND, Wis. (AP) -- A northwestern Wisconsin poultry processor is recalling more than 2,000 pounds of chicken over concerns it may have been contaminated with an industrial disinfectant. The disinfectant is not approved for use in poultry processing.
WI and Millie (Gene) Link of Ridgeland, WI; and many nieces and nephews. Joyce Iverson Delegard, his wife of 62 years, preceded him in death on September 27, 2010, and we think he didn't want to miss spending Christmas with her. He was also preceded in ...