What is my pub worth?
Your pub has a heartbeat and to you and your loyal followers, it should be worth a pretty penny.
However, if your evidence for valuation is not up to scratch, your pub might just be worth the sum of its parts; fixtures and fittings and maybe a small value “Key Money”.
It is a truism but your pub is worth exactly what someone will pay for it. A buyer may fall in love with the location, the look of the pub and its facilities but they are looking to buy a business. So, the financials are important to give the buyer the evidence that allows their head to follow their heart.
“What evidence do buyers need?” you may ask. A genuine set of accounts showing income and spending and profit, ideally over the last 2-3 years, is a great starting point. Your accountant should be able to provide these and will be able to bring them up to date if you are part way through a year.
Accounts are key to a solid valuation. Very often a year spent planning the sale of your business and facilitating the accounting process to evidence your success is well rewarded.
All of this is not to say that your pub cannot be sold without current accounts. It can, but it will take longer and you may not get as much for it as you would if you had the evidence to back the valuation.
The “Multiples” game
Once we have looked at your accounts thoroughly to gain an overall picture of your profitability, we look to establish an appropriate “multiple” for your pub.
We look at certain “desirability factors” and multiply your profit by these factors. So if we take two pubs with identical profit, what could make one more valuable than the other?
- Level of upkeep
- Future bookings
- Stability of the business over preceding years
- Scope for growth
- Regard in which the business is held (Trip Advisor/Facebook/Google reviews)
There are many more and we use our extensive experience to establish a realistic, market-driven, valuation for your pub.
Valuing your pub correctly, at the start of the sales process, will lead to a smooth sale giving you the best return in the shortest time.