| |  | CAR WASH APPRAISAL Car Wash Owners require appraisals of their business for many reasons. We have performed client appraisals for the purpose of: Estate Tax matters, new or refinancing, determine market value for selling the business, compare value of business with purchase price for prospective buyers, personal reasons and in martial situations.
When we are retained to perform an appraisal on a car wash or car care center, we use the following criteria in appraising and determining the market value of the business, improvements, fixtures and equipment: | | • | Analyze facility including all improvements, equipment and signs. Review demographics.
| | • | Hold discussions with owner and accountant
| | • | Review Operational Income and Expense Statements for prior 2 years
| | • | Make adjustments on Income and Expense Statements to show specifically what income and expenses are related only to the operation, i.e. appropriate rental expense, deduction of owner’s salary, extremely high management cost, owner’s personal expenses, also deducting amortization, depreciation, interest and principal payments.
| | • | Review existing competition within a 3 mile radius
| | • | Determine if the property is free of toxic contamination
| | • | If on Leased Property: we analyze Lease Agreement for term of lease, current rental, rental increases, lease options, etc.
| | • | If Sub-Leases are part of the business, these are analyzed with same criteria as above
| | • | Determine if additional services could be added and income increased
| | • | Determining the Market Value – we have two approaches, they are: 1) Using a Multiplier of 12-25 times of the adjusted monthly average income. This approach is usually used on Leased land and would exclude real estate and 2) Using Times Earnings with usually a range of 4 to 7 times of the annual adjusted net operating profit after adjustments described above. This method is used primarily when real estate is included.
| | • | After determining Market Value – we then prepare a booklet, which describes: size of property, improvements, business and operation, equipment, ownership history, competition, demographics, income and expenses, appraisal and value approach, purpose of appraisal, conclusion and comments, letter outlining the market value and how it was determined. In lieu of the booklet, a short form can be prepared showing the valuation of the business.
| | Due to different variables, no two businesses would be analyzed the same to determine market values.
We provide these and any additional services desired during and after the analysis and appraisal for a set fee.
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