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 Used Car Dealerships Nissan Leaf S Eleva WI 54738 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 Nissan Leaf S Eleva WI 54738 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 5 Perks of Buying From a Car Dealership Nissan Leaf S Eleva WI 54738 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 Nissan Leaf S Eleva WI 54738 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 Nissan Leaf S Eleva WI 54738 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. Nissan Leaf S Eleva WI 54738 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, Nissan Leaf S Eleva WI 54738 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, Nissan Leaf S Eleva WI 54738 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.

Eleva WI - BingNews Search results

  • Doris Sather

    Doris Agnes Tollefson Sather, formerly of Eleva, Wisconsin, passed away peacefully surrounded by her children on Saturday May 5, 2018 at Grace Lutheran River Pines nursing home in Eau Claire, Wisconsin. She was born May 28, 1924 to the late George ...

  • Eau Claire Marathon: Full Marathon Results

    Tammi Braund F 39 Cushing WI 3:20:39; 38, William Jurney M 51 Eagan MN 3:20:40; 39, John Harris Jr M 51 Atlanta GA 3:22:41; 40, Christopher Sanders M 19 Blue Earth MN 3:23:18; 41, Michael Beaudrie M 48 Eleva WI 3:23:26; 42, Mitchell Fuller M 23 Saint Paul ...

  • Lyman M. Larson

    his sister Carol Erickson of Eleva, WI and his sisters-in-law Shirley Larson of Mondovi, Betty Larson of Racine and Janice Larson of Wisconsin Dells. Funeral Services for Lyman will be held on Thursday, January 18th at 12:00 p.m. (Noon) at Bethania ...

  • 2 Wisconsin dogs become Senior Dog Prom finalists

    ELEVA, Wis. (WEAU) -- Life can be ruff sometimes. But when you have fur and have a chance to go to prom, life cannot be any sweeter or rather cuter. A homeless shelter for senior dogs called the Grey Muzzle Organization in North Carolina needs your help to ...

  • Update: Ceiling concerns prompt School District of Eleva to cancel school, transfer students

    Eleva (WQOW)-Schools are closed to Eleva-Strum students ... and that's why classes have been canceled on Friday and Monday. "Due to our Wisconsin winters right around the corner, we need to address this in some capacity. In order to do that, the board ...

  • Eleva Strum's Jedediah Lorenz Following His Father's Footsteps

    Eleva, WI (WQOW) -- Sports are often described as a family affair, but for a father-son duo at Eleva-Strum High School, that saying has never been more true. Jedediah Lorenz, a Junior at Eleva-Strum won the Bangor Sectional Pole Vault last week ...

  • Hauge, Jeanette M. "Jeannie"

    WI. Throughout their married life they lived and worked in Milwaukee, Blair and Eleva, WI before settling and retiring in Schofield, WI. At the time of her retirement, Jeannie was a certified meat inspector for the USDA, a job in which she and Bobby shared ...

  • Car Dealerships Nissan Altima 2.5 S in Bloomer WI
  • Car Dealerships Nissan Versa SV in Osseo WI
  • Car Dealerships Chevrolet Traverse LS in Strum WI
  • Car Dealerships Acura TL AWD in Eau Galle WI
  • Car Dealerships Ford F-150 STX in Eleva WI
  • Car Dealerships Nissan Pathfinder S in Eau Claire WI
  • Car Dealerships Ford Focus SE in Menomonie WI
  • Car Dealerships Kia Sportage LX in Cornell WI
  • Car Dealerships Nissan Sentra SR in Cadott WI
  • Car Dealerships Lexus IS 250 in Sand Creek WI
  • 32 Vehicles available

    Sort by:
    9
    Used 2015 GMC Sierra
    Mileage
    43814 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Chevrolet Silverado
    Mileage
    20071 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Chevrolet Silverado
    Mileage
    10125 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Nissan Altima
    Mileage
    33482 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Lexus Is 250
    Mileage
    3430 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    New 2017 ARGO Frontier 8×8
    Fuel type
    Gasoline
    Distance
    View more
    9
    New 2017 ARGO Frontier 6×6
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Chevrolet Silverado
    Mileage
    37268 mi
    Fuel type
    Gasoline/e
    Distance
    View more
    9
    Used 2014 Nissan Maxima
    Mileage
    32894 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Nissan Altima
    Mileage
    45667 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Nissan Sentra
    Mileage
    30333 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Escape
    Mileage
    10776 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Ford Fusion
    Mileage
    17575 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Nissan Sentra
    Mileage
    13077 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford F-150
    Mileage
    46224 mi
    Fuel type
    Gasoline/e
    Distance
    View more
    9
    Used 2014 Ford F-150
    Mileage
    51894 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Escape
    Mileage
    45651 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Versa
    Mileage
    32707 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Maxima
    Mileage
    29386 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Maxima
    Mileage
    26013 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Kia Sportage
    Mileage
    34437 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Fusion
    Mileage
    36034 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Fusion
    Mileage
    34555 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Altima
    Mileage
    30933 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Fusion
    Mileage
    27387 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Altima
    Mileage
    33456 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Pathfinder
    Mileage
    33913 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Nissan Altima
    Mileage
    34028 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2013 Nissan Maxima
    Mileage
    34308 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2012 Honda Cr-v
    Mileage
    76048 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2015 Toyota Corolla
    Mileage
    22201 mi
    Fuel type
    Gasoline
    Distance
    View more
    9
    Used 2014 Ford Focus
    Mileage
    44306 mi
    Fuel type
    Gasoline
    Distance
    View more
    Show all