Location: Fruitland, ID
Total Health is a small health food and nutrition store in Fruitland, Idaho listed for sale at $89,000. It has been in business since 2005, and although it is in a small town, this company has a loyal customer base. It pulls customers from larger nearby towns, as well as a small online presence. Total Health also sells bulk grains and dry goods, and can ship special orders. They offer vitamins, supplements, raw milk, gluten-free products, bulk grains, pet food, and essential oils.
The following forecast shows a model for 3% growth for 10 years, which gives a profit of 8.39% per year and enables the company to buy the business and a building for it (the store currently rents retail space). With a building of 1,350 square feet on an acre of land, at a cost of $188,400, the business could grow. The weighted average cost of capital for this company would be 7.67%. We predict this company is a good value at a price of $89,000 with the subsequent purchase of a building.
The assumed growth rate for this model is a conservative 3%, although the predicted growth rate in this industry is 7 to 14%. An important assumption for this forecast is that mortgage financing can be found locally for 3.28% based on the company’s good financial standing and debt rating. The assumptions in our spreadsheet can be changed for current conditions or estimates.