Business good will

[johnycarper]

Can anyone tell me if in France they add a certain amount for goodwill when you buy a business,is it similar to the uk where there is usually a figure they multiply the turnover by.

Thanks.

[Pickles]

The business basically only consists of its tangible assets (property, equipment, stock, work in progress/order book etc) and the rest is essentially intangible "goodwill" (for the purposes of normal people buying businesses rather than analysing them). People will use various means for valuing a business, eg using the turnover on its own or profit x 10 or whatever. In reality the figures used will not represent reality and it has to come down to "what do the buyer and seller agree on?". They may ASK for profit x 10 but you wouldn't pay that, unless you could see that you could sell a lot more or cut costs significantly. Commercial investment property (which in general is a fairly pure form of business transaction) is generally valued by the return (relative to interest rates) and by the quality of the tenant, and even THEN that just provides a starting point for bargaining.

[johnycarper]

Thanks for that and someone else over here told us 10 x but I found that a lot as in the uk its only about 4 or 5.But as you say its only worth what someone will pay.