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Jason M. Tyra, CPA
Jason M. Tyra, CPA, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 178
Experience:  Principal at Jason M. Tyra, CPA, PLLC
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I am trying to figure out how to value a dry cleaner pick up

Customer Question

Hi!I am trying to figure out how to value a dry cleaner pick up location.What percentage of the gross should be rent? What percentage of gross should I be paying for the plant to perform the work?I found a place for sale in florida that STATES that they are grossing about $18k/month, but only spending $1,600/month for dry cleaning wholesale.I currently have a laundromat, with pick up dry cleaning. I currently pay 50% of the dry cleaning retail for the wholesale fee. That means, if the place I am evaluating is grossing $18k/month, I would expect to pay about $9k in wholesale fees. I have not received the NDA, to verify, but I need to be prepared to understand the cash flow.thank you!
Submitted: 1 year ago.
Category: Finance
Expert:  Jason M. Tyra, CPA replied 1 year ago.

Hi There:

It sounds like you should probably retain a CPA to perform due diligence work on your behalf. You can compare expenses to industry averages, but you can never be sure whether the data you are given are accurate without checking for yourself. Since you already own a dry cleaning operation, you already have an idea what it should cost to deliver the service. My guess is that you think your target's costs are too low and I think you are probably correct.

If you select a practitioner that also has business valuation experience, then he or she would also be able to suggest a purchase price after the work is done.