Question: Can I sell a business NAME as opposed to assets? Hi, I own a tour company. The customer comes to me via Internet ads, print ads, brochure racks. We will do about 380,000.00 gross and $150,000 net this year, and have for several years. My situation is unique. I run tours on a piece of property, it's privately owned and we are losing the lease. Don't want to stay in business, but we know the phone will continue ringing, so were wondering: If someone wanted to get in the same tour business we're in, and had some property on which to do the tours, would selling my company, which is really just a name and good will, referral and repeat business and new business , be of interest to him, and how to arrive at a price/value?

Answer #1: The business NAME is, in fact, one of the many intangible assets that someone buys when they buy a business.  A large part of the business goodwill is vested in the name, as this is how customers identify the company providing them with goods and services that the business provides.  Many business have little, or virtually no, tangible assets, so the greatest portion of the business value is attributable to the goodwill, a large portion of which IS the business name, along with the customer and vendor lists.

You could sell just the business name, but most buyers would also want the customer and vendor lists, unless you are planning to license your name or set up franchises.  It sounds to me like the specific location is not relevant, so long as it is close enough to be the your market area.. The value will be dependent upon what the name can bring to a buyer in terms of revenue and profits.  I am unsure if you are saying that the PIECE of property is, in fact, the ATTRACTION site.  If so, it will really not be the same business if you lose the attraction, so this will heavily impact the perceived value to any buyer.

Kathryne Pusch
BBN Atlanta, ConsultKAP, Inc.
kap@consultkap.com

Answer #2 This question is difficult to answer. I cannot determine the nature of these "tours", or whether the tours given are specific to the property, or whether they can be run from another facility.

If the tours really have nothing to do with the property being leased, then I see no reason why the Name of the company, along with its phone number and website cannot be transferred. I would then price the business as I would any other.

On the other hand, if the tours are of that property in particular, and if the name is specific to those tours and the property, I see no value in the name whatsoever, since the buyer would have no access to the property to provide the tours.

Ed Walper
President
The Walper Group
www.thewalpergroup.com

Answer #3 Your question is really "What is the name worth?" Before the question can be answered we need to know whether there are any other properties similar that could take advantage of the name. You said it was unique- then it follows it may be tough to find someone else who would find value in it.

Are you saying the customers would buy from anyone who offers something interesting like yours. If so you are really selling an ongoing customer base. If not the value is probably $0. Intellectual property, which is what the name is-is always difficult to appraise. If it is the sole reason you have a net income of $150,000 then it is marketable. But my guess is your efforts and other marketing are the reason for the income, not the name. If it is a website address name then you could market it or sell it through several website auction companies.

Finally, if it is geographically specific for customers then I would say it would be very difficult. If you have any further questions feel free to call me.

Jeff Hoops
The Haley Group
jeff@thehaleygroup.com