How Small Businesses Can Determine Their Financial Value

Let’s say that you owned a gift shop, a restaurant, or a clothing store for five years. Wouldn’t you WANT to know what the financial value of your business is? Of course, you would. But most small business owners have no idea what their business is really worth.
Joe Ritz (pictured below), who owns the Sports and Collector Car Center in Tempe, Arizona, does. Ritz uses computer software that enables him to obtain a current estimate of the financial worth of his retail business.
As Mark Cohen reports for the New York Times: “What he [Ruiz] did not know when he first tried to buy his own repair shop several years ago was how difficult it would be to pin down shop owners on the actual value of their businesses. Few owners seemed even to know how to make a good guess. ‘One guy I talked to about selling said the business had to be worth $1 million, because that’s what he needed to retire on,’ Mr. Ritz said. ‘Another was like, well, let me see, my alimony is $4,500 a month. It was ridiculous. I finally just gave up and decided to start my own shop. Today, that shop has four mechanics working on roughly 20 cars a month, and Mr. Ritz can tell you exactly what he thinks the business is worth. All he has to do is check the latest figure on a cloud-based computer program that synchronizes with his regular accounting software to give him a real-time estimate.”
Read more about this story by clicking the image below.

Photo by Joshua Lott for the New York Times

 

This entry was posted in Part 3: Targeting Customers and Gathering Information, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 8: Putting It All Together, Technology in Retailing and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.