We see stock quotes every day, but what’s happening with the prices of Subways and nail salons? Although the title to this article indicates that the price of small businesses in Las Vegas are on the upswing, you don’t have to read down very far to see, “It’s definitely a lot tougher market than it was two years ago, but people feel it’s on the rebound,” [BizBuySell general manager Mike] Handelsman said.
With unemployment in Sin City approaching 14%, the unemployed are looking to buy themselves a job, while selling business owners have had enough after suffering through not only the real estate bust, but hikes in taxes and the minimum wage.
Does it seem like there are too many pizza joints and hair salons in your town? Same in Vegas, “A hair salon on Sahara Avenue that once sold for $170,000 is now listed for $35,000,” according to business broker Jeff Nyman who elegantly sums up the institutional financing environment, “I don’t care what they say, banks are not loaning money.”
So how are any deals getting done? Seller financing. But if the seller wasn’t making enough cash flow to pay the bills, what’s the likelihood the new buyer is savvy enough to turn the business around, pay the bills and service the seller carry-back note?
Just as too many strip shopping centers were built in the boom, too many sandwich shop tenants opened to lease space. “The problem is they overbuilt,” Nyman said. “We just did a sub shop and the seller walked away with $190 in his pocket. Pretty sad.”
Meanwhile, the minimum wage for the average small retail employer in Nevada will reach $8.25 this summer. In May of 2007, the minimum wage was $5.15. What does that do to business valuations?
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Mr. French, you know the owners of these food establishments improvise to keep costs low.
In other news, I haven’t seen a stray dog or cat or rat in a long time. Pass the spice rack.
Only at the places you patronize HL.
“Meanwhile, the minimum wage for the average small retail employer in Nevada will reach $8.25 this summer. In May of 2007, the minimum wage was $5.15.”
In the first half of my lifetime, the shop rate for labor in a garage or machine shop was roughly twice the hourly pay rate of the mechanic. If we knew the total of subs/employee/hour and the material cost and overhead/sub and pay was $8.25/hour I wonder how much net profit/hour the shop is making on the employee?
The real human suffering during the “bust” times – why do we always see these stories, but no one in the media talks about how we got here?
This phenomenon, this is a country’s economic development is inseparable, especially a period, if the economic prosperity, employee welfare nature also improved.
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