Just heard the folks who run Rancho Paraiso in Cabrera are selling their business. I have no interest in it, just putting the word out. It's for the business only(horses and gear), not the land which would be leased. It's doing well, but they need more time for their restaurant, Chicos in Cabrera.
- Thread starter PeterInBrat
- Start date
Ranch for sale in Cabrera
Cabrera?
that would be on the northshores, right?
Mod,
you need to move it to the apropriate section to be seen by people of that area.
Mike
that would be on the northshores, right?
Mod,
you need to move it to the apropriate section to be seen by people of that area.
Mike
Gee thanks, no business in DR is worth even looking at if it does not include the land and a clean title. (Several rare exceptions)
Yo guys, I know this business extremely well for a couple of reasons. Number 1, I used to own the horseback riding excursion here with a partner so I know it pretty well. Something like 20+ of my horses are in that herd. Number 2, I know the guy who took it over and provides the services for my own vacation rental business and others in the area. He does an amazing job...much better than we ever did.
Point is, if you run this operation in a positive manner you will make money. No doubt about it. He's just making more money in the most popular restaurant in the area which he also owns/operates. He had to make a choice. Horses came in last <grin>.
If anyone in the country has the talent to run this business, "Abe" has built it to a level of reputation (highest on TripAdvisor) and income you could want. I'd recommend it to anyone. Damn good business.
There is literally no "ranch for sale in Cabrera" in this picture. The horses are on leased land and used for the excursion. A more appropriate title would be "Excursion for sale in Cabrera". No land at all for sale but getting leased land in Cabrera is pretty easy.
Point is, if you run this operation in a positive manner you will make money. No doubt about it. He's just making more money in the most popular restaurant in the area which he also owns/operates. He had to make a choice. Horses came in last <grin>.
If anyone in the country has the talent to run this business, "Abe" has built it to a level of reputation (highest on TripAdvisor) and income you could want. I'd recommend it to anyone. Damn good business.
There is literally no "ranch for sale in Cabrera" in this picture. The horses are on leased land and used for the excursion. A more appropriate title would be "Excursion for sale in Cabrera". No land at all for sale but getting leased land in Cabrera is pretty easy.
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Looks to me you are paying for some assets (parts of horses and gears and probably some other equipment), and goodwill. The goodwill includes existing business operations and practices, reputation (see mentioned tripadvisor ranking) and probably customer base (tour operator contracts, repeat customers, etc.)
If Robert C. wants to sell his Motocaribe business, you won't be buying the house where he has his office. You would be buying the bikes (aka horses in this case), reputation, customer base, operations procedures (e.g. where to go how when where to sleep and eat, existing supplier contracts, etc. so you don't have) to invent the wheel all over.
or if Robert W. decides to sell DR1, you won't be buying the building where the office is located, or the colo facility, or the Internet where DR1 business is ran! You would be buying the brand, the existing customer base, the traffic, (all of that referred to as goodwill) and maybe a server or two.
So I wouldn't say that in this case, it is paying lot of money for nothing.
So in this hypothetical case of Motocaribe being for sale, if the bikes were leased or financed, you would feel the same? Business should not be evaluated for purchase and price based only upon what the net assets are worth, but also based on existing income, cash flow, etc. It's called cash valuation. In case of DR1, I am sure the whole enterprise is worth substantially more than the servers it is being ran on.
So why couldn't the excursion business be worth money simply because of an existing income stream, regardless of net assets it owns?
Buying a fully functioning established business makes sense if the conditions are right. What I could never get was when someone was selling a bar or restaurant that had been closed for six months or more just to be able to take over the lease and then have to start from the ground up. People are always wanting to sell their worn out chairs and dismal fixtures at full retail price and make a profit off of their poor business skills. "Hey, I installed that fan 5 years ago! That's another $100 of upgrades I did!"
When it comes to a retail space, I don't think I'd ever rent again. Too easy for the landlord to screw you over.
When it comes to a retail space, I don't think I'd ever rent again. Too easy for the landlord to screw you over.
Profit of the business
I would say a price could be 3-5 years of the business gross profit, would that be about right?
So knowing somebody who would sell his internet based business for just 1 year of the gross profit would mean I would have my return of investment back after the first year and then start making money, correct?
I would say a price could be 3-5 years of the business gross profit, would that be about right?
So knowing somebody who would sell his internet based business for just 1 year of the gross profit would mean I would have my return of investment back after the first year and then start making money, correct?
correct,
but ONLY if the seller does not at the same time open the same tiype of business newly nearby/on the same market and uses HIS reputation/name to gain within a short time frame the clientel which he had formerly, which would bring him his good running back within a short time, while the sold one would loose market/customers and shortly stand alone, with years ahead to get the investment back, if ever.
Mike
Of course ... I think this can be handled with a contract agreement and in this case the seller wants to start something totally different and gives somebody else the opportunity to make a living out of it while his long term clients staying in good hands. Not sure if even clients would just move back and forth if the new owner provides a good services, it's also stress on them.
The owners are busy with their restaurant which is now taking up too much time for them to do both businesses. They have a stone hearth pizza place and serve fast casual food.
Hi Mike,
I would hope that anyone interested in purchasing our business has enough common sense to include a non-compete agreement. If the person does not have that bit of business sense then we have no interest in selling to them, as we'd really like to see the business continue to prosper along with our area.
Actually, "the lucky new owners of" a very successful, established, reputable and highly-rated business are getting a turn-key operation that has taken several years to develop into what it is. The new owners could easily pay our asking price with the business they'll do this upcoming high season alone. On the other hand, you could go out and buy some ranch land, a bunch of horses and tack, and try to start a business like this from scratch-no customers, no guidance, no reputation. What will THOSE new owners have? A whole lot of hope that maybe their business will work. And if it doesn't, then MAYBE they can sell all that land. But hey, at least they paid for "something", right?
Thanks for the excellent points, rubio_higuey. I think some folks have a difficult time putting a value on a business if it does not include some sort of "brick and mortar", or in this case, land.
For clarification, we own ALL of our horses and gear. Some were purchased from Castellamonte, and as he stated we provide services for his villa (in fact, I have a tour with them today) and practically all others in the area.
And thanks for your point on "cash valuation", as it seems some don't get it. To further explain your point, and taking a point from PeterInBrat, if one were buying a restaurant, including it's equipment, would one pay the same amount for a thriving restaurant that is always full and making tons of money as one would if it was dead and no one ever ate there? The answer is obvious and hopefully will help some here to understand that what a business is worth is determined by much more than physical assets.
Thanks again for your points and examples!
For clarification, we own ALL of our horses and gear. Some were purchased from Castellamonte, and as he stated we provide services for his villa (in fact, I have a tour with them today) and practically all others in the area.
And thanks for your point on "cash valuation", as it seems some don't get it. To further explain your point, and taking a point from PeterInBrat, if one were buying a restaurant, including it's equipment, would one pay the same amount for a thriving restaurant that is always full and making tons of money as one would if it was dead and no one ever ate there? The answer is obvious and hopefully will help some here to understand that what a business is worth is determined by much more than physical assets.
Thanks again for your points and examples!
Just for clarification, Castellamonte sold us a number of horses some years back. The sale includes the entire business operations, and part of that is all the gear and horses.
That's correct webmacon. And businesses are usually sold for about 3 times what they make in a year. Ours is being sold for less than what we make in ONE year. Someone would have to royally screw up to not make money within the first year, as the business is not just functioning and established, but thriving. Our "problem", as mentioned by Castellamonte and PeterInBrat, is that we also own a very successful restaurant in Cabrera (Chico's Tropical Cafe) that we're actually working on expanding. So we simply can't be as hands-on as we like when both businesses are doing so well. And that attitude is what has made both of our businesses succeed.
Hi Rancho Paraiso.
You are right on that, selling a business is not just getting the money but also find the right buyer who will not run your hard worked years down in a few months. Same thing here, hope you find a suitable buyer faster than me. Good luck.
You are right on that, selling a business is not just getting the money but also find the right buyer who will not run your hard worked years down in a few months. Same thing here, hope you find a suitable buyer faster than me. Good luck.
Just to make it even more clear - a business worth is only the sum of it's discounted cash-flow over say 10 years. I.e. if the excursion was sold in operation and it made 10K a year, it would be worth roughly 800K discounting at 4%, or 600K discounting at 4.5%.
Only if the operation was sold as going concern.