On 7/7/16 10:06 AM, Joe Subich, W4TV wrote:
On 7/7/2016 11:24 AM, Alan NV8A wrote:
I would have expected them to sell the business -- with its "good
will" -- as a going concern.
Unfortunately, there is little value in "good will" for small
businesses these days. The truth is that the liquidation value of
inventory, receivables and physical assets (real estate, plant,
equipment, etc.) is often higher that the value of the business as a
"going concern" thanks to all the regulations and red tape faced
by small businesses.
I could go through multiple business valuation models but in most small
(sole proprietorships, "S" corporations) businesses there is little if
any "profit" above the "owners wages" - therefore little "good will"
value. Again, any accumulated profits are found in inventory, real
estate and receivables. It is often as easy to liquidate than find a
buyer who can pony up the cash to purchase the business and then cover
both debt service and "owner's wages" just to break even.
The same is true of the hundreds of small machine shops supporting a
large government program, like Space Shuttle.
There's a ton of these 5-10 people, few million/year kind of businesses
around. They've tailored their shop to the specific customer and
product, and if that goes away, there's a substantial challenge in
shifting over.
Someone got a contract back in the 70s making some specialized parts,
made them for 30 years, the shuttle program ends, and aside from the
value of the machine tools in the shop, there's not much else. So the
owner retires and sells the assets, rather than trying to find someone
to take on the "machine shop" business.
There's not a lot of electronics repair places - the tooling and
specialized equipment required to do real repair is expensive, once you
get beyond "swap boards and assemblies". There is a very small market
(if any) for places willing to do SMT rework on a $300 TV to replace a
$20 part.
In the ham business, it's much the same: repairs are done by small niche
suppliers who have a supply of obscure parts for specific models or
maybe the manufacturer. The internet has made the niche supplier a
viable business - you don't need a storefront, you don't need to depend
on someone happening to know you do this. You just have a web page that
says, somewhere on the index page, "VFD displays on 1980s Yaesu radios
repaired" and google will find them when the ham with the dying display
goes "VFD display Yaesu FT-757"
_______________________________________________
_______________________________________________
TowerTalk mailing list
TowerTalk@contesting.com
http://lists.contesting.com/mailman/listinfo/towertalk
|