Question

As a young boy, drew remembers his grandfather telling him, "son, if you can find something you like to do, and somebody is willing to pay you to do it, well, that's the secret to a great life." The way Drew saw it, this was his big break. For the past five years, he split his time between school and working for a local tree farm/nursery business. The owner recently announced he was ready to retire. As Drew began creating a business plan, he contemplated what the business might be worth. How much will he need to buy this business? for starters, drew:

a) needs to find a government data base that outlines what nursery businesses are worth, on average, across the country.
b) should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage.
c) will want to determine the assessed value of the acreage that the business owns, and then bid competitively.
d) needs to understand that it's difficult to buy an existing business, rather than start your own. the key will be to meet with the company's accountant, and explain your interest. the accountant will have all the answers.

Answer 1

Answer: b) should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage.

Explanation: Drew needs to speak to the current owner as he would be the best person to person to tell him about the business value in asset and market, it's earning potential in the environment it is located and society at large and it advantages and disadvantages as this would help drew better prepare for the task ahead.