How do you value a property like Tropical Blooms?
We have spent almost a quarter of a century developing and expanding this venture. It has been our lives for so long. Its where our children have grown up. We are surely biased.
Do you count the number of plants and multiply by the figure they sell on the open market for? Do you call in a valuer who just looks at the unimproved land value and the cost of the house? Do you ask your accountant to value the business and goodwill generated by a customer base of over 500 florists? Do you place a value on the history of a business that virtually started a new industry?
In the end we chose to list all of the components that make up the property and business and just leave it to the professionals. We selected two agents experienced in our type of venture, gave them the details and asked for a realistic price. Both advised a price of $2 million plus.
Their reasoning was as follows;
1/ There are a number of acreage land and house parcels of similar size to ours within a few hours of Cairns priced in the 1-1.5 million dollar range. (None have permanent creek on 80% of their boundary and not one is within 18 minutes of the Cairns CBD)
2/ We have one of the largest in ground quantities of tropical plants in Australia. Even at $1 per rhizome (Heliconias sell for $3-$15 on the internet) it has a value of almost half a million dollars.
3/ The property comes as a walk in walk out sale with a listed current replacement value of plant and equipment in excess of $300,000.
4/ The business, based on actual adjusted net profit over 5 years has been valued by the companies accountant at $460,000. Theres also goodwill for 23 years to consider.
We took their advice and listed the property at 1.99 million. Timing is everything they say and unfortunately ours has not been the best with the world economy having a direct impact on sales like ours. Even so we have had our share of interest, but to date all have chosen a wait and see approach to the economic situation.
Now it seems that the economy has come full circle. The stock market has bounced back dramatically. Major city median house prices Australia wide are now higher than any time in history. Company forecasts are all positive and our own trading figures normal.
For us, we just want to retire and sail away while health and time permit. We have already moved back the build commencement date for our new yacht three times. We will not give a firm start date until we sell the farm.
For this reason and because of the positive upturn in the economy we have decided to help stimulate a fast sale by reducing the price by $250,000 to a very competitive $1,750,000.
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