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Fair market value of dive shop

Discussion in 'Business of Diving Institute' started by vjongene, Jun 30, 2017.

  1. luscioman

    luscioman Manta Ray

    # of Dives: 500 - 999
    Location: Florida
    625
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    Short answer is 5x the yearly profit. Also this has backfired on many business where the owner takes a wad of cash everyday home to not pay taxes.
     
    Darcy Kieran likes this.
  2. JamesBon92007

    JamesBon92007 Great White

    # of Dives: 2,500 - 4,999
    Location: Southern California...too far from the ocean
    3,002
    1,173
    113
    Judging from business owners that I have know this is fairly common. So common, in fact, that the IRS is probably acutely aware of it. There seems to be an unwritten law that says you can get away with a certain percentage but after that they will come after you.
     
    Darcy Kieran and abnfrog like this.
  3. giffenk

    giffenk Great White

    # of Dives: 500 - 999
    Location: toronto
    4,924
    2,403
    113
    Is you goal to diversify your investments or to have a hobby thing to play with while you piss away your retirement money?

    There are lots of investment "syndicates" out there that will make you a better return with zero effort on your behalf. You just need to look beyond the crap offered to the common person (stocks, bonds, mutual funds,...).

    Find an investment firm that offers alternate investment vehicles. Things like: roads, bridges, hospitals, shopping malls, hydro electric plants, solar farms, commercial buildings, industrial warehouses,... You get to own a very very small slice of a lot of different things.
     
  4. JamesBon92007

    JamesBon92007 Great White

    # of Dives: 2,500 - 4,999
    Location: Southern California...too far from the ocean
    3,002
    1,173
    113
    That sounds like a REIT. Several years ago they were considered a sound investment, a few years ago not so much. Are they back in favor? According to one site they were recently averaging 11.8% return.
     
  5. giffenk

    giffenk Great White

    # of Dives: 500 - 999
    Location: toronto
    4,924
    2,403
    113
    Not a REIT. A REIT is just like a mutual fund except they buy real estate. You buy shares of the REIT. You do not own any of the underlying assets.

    I meant using a individiual investor where you actually do own a portion of the underlying assets. You have an individual portfolio that is tailored to your investment strategy.

    My examples did make it sound like a REIT as I did not explain the infrastructure examples well enough. For the solar farms, there is no real estate involved. Only the solar panels that are being installed on the top of buildings in cities.
     
    JamesBon92007 likes this.
  6. Nosy Turtle

    Nosy Turtle Garibaldi

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    Not to resurrect a slightly old thread, but one point of consideration should be the "intangibles".

    In this Dive Operation you're looking at (or any of them for that matter) pay attention to the intangibles like how active the owner is in the local community, with nearby resorts and other areas. You have to consider who the divers are, where they are coming from and what keeps bringing them back?

    For example, is the owner of the dive shop a 'super fun guy/gal' that people enjoying coming back to see? Does that present a problem? Can you also be that 'super fun guy/gal'?

    Is there a long relationship with nearby resorts/hotels that provide a significant amount of referrals for various things because of the owner? Would you be able to keep those relationships wit the locals or would they go elsewhere? It would suck if a lot of the business revenue came from say "Discover Scuba" type programs from nearby resorts and somehow that relationship was lost.

    Don't get me wrong, the numbers are important (hobby or not), but IMO the more the business is concentrated around key people, a key person or a key relationship, the less valuable the business is.

    Just my 2 cents....
     
  7. JackConnick

    JackConnick Optical Ocean Sales ScubaBoard Business Sponsor ScubaBoard Supporter

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    One thing to consider is the amount of stress you'll be taking on. As you are older this gets wearing. You're the babysitter for customers and employees. The finances are always a juggling act. It all comes down on your shoulders sooner or later. Not to mention hurricanes, accidents and many more issues. You'll be working at least 18 hours/6 days a week, don't kid yourself otherwise.

    Do you really want to be tied down that way?

    Anyone want to buy an UW Photo Store?
     
    Darcy Kieran likes this.
  8. island girl

    island girl Angel Fish

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    did you end up buying? We are considering the same.
     

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