There are three ways to start a piano business.
(one)topExisting piano shop
(two)joinExisting Chain Music Stores
(three)Create your ownA brand new piano shop
This article will analyze the differences between the three and the details that need attention.
(1) Top piano shop
Like other companies, the selling price is the most critical part of taking over the top.
This will affect future payback cycles, entrepreneurial cash flow, and more. The ask price consists of two key elements:
(A) Asset transfer (Duanjin Scale)
The piano shop has 10 straight pianos worth 100,000 yuan, decoration of 100,000 yuan, and making money tools of 100,000 yuan.
The net asset value of the music company is 300,000.
(B) P/E ratio (future return time)
The music store earns 100,000 a month, the selling price is $1.2 million, and the payback period is one year (P/E ratio = 1)
Of course, this is the simplest and crudest method of valuation. There should be many elements in it.
Including goodwill, future growth expectations, etc.
But this is the most basic concept of acquiring a company.
The devil is in the details:
1. In the calculation of (A) Asset transfer, is there any depreciation calculation?
The purchase price of the instrument, not equal to the current value.
2. It is the assets that bring cash income, the opposite is the liabilities.
If the piano store itself does not have a certain ability to make money, 300,000 is just a liability.
3. In (B)In the price-earnings ratio calculation, whether the income of the music company passes through yourdue diligence(due diligence)?
Before purchasing a company, the buyer must consult the company's audit report.
In order to know whether the company you buy has debts, whether the assets are overvalued, the company's ability to make money, and so on.
A qualifying audit report, roughly like this:
Even many listed companies have a lot of water in their accounts after being audited by the big accounting building.
However, a Hong Kong limited company is required to file with the Inland Revenue Department annually,
An audit report issued by a qualified auditor.
Checking the audit report is the most basic due diligence before buying a company.