John, The intangible value of the business, also known as “good
will,” is a factor based on the annual revenue of the business. I
would suggest that a good accountant, or business broker, could
provide more as to what multiplier would be used to
determine the value of this particular business.
If the business has been a one-man trade shop, a lot of that
business may be lost when the “key man” leaves. A retail store that
runs like a franchise could easily assume new ownership with few
changes. If it is a one-man shop but the business owns a proprietary
formula or fills a niche that no other business can fill, or has an
extremely desirable location that goes with the business, the loss
of the “key man” can more easily be overcome.
In the case of your friend’s store, the new owner would have to be
experienced in jewelry repair, or be willing to hire someone who
was. He or she would also have to look at the potential that the
store had for growth. They would also have to determine just how
loyal the old customers were to the individual who did their
repairs, as opposed to the reputation of the store. None of this is
I am sorry to hear of the loss of your friend. His family may place
an emotional value on the store as well. I sincerely hope that
everything works out for the best, and doesn’t become a feud between
heirs and lawyers, as seems to happen far too often.