The Importance of Asset Valuation for Business Owners and Investors in Toronto
Consider a business owner who owns a retail rental space that has been leased to a restaurant operator for 15 years. Recently, the operator’s son took over the business but has failed to pay rent for the past eight months. After regaining possession of the space, the owner plans to rent it out again but first needs an accurate asset appraisal of the equipment left behind by the former tenant.
This is where a professional asset appraisal becomes essential. By ensuring the valuation is conducted legally and accurately, the owner can confidently determine the fair market value of the equipment. At our firm, we adhere strictly to the Canada Tax Act’s interpretation of “fair market value,” ensuring all asset value reports meet the highest standards of accuracy and compliance.
Eric Jordan, Toronto Business Valuation Specialist
877 355 8004 - pindotca@gmail.com
Ben Khan, Toronto 5 Senses Inspection Report Specialist
- benkhan@pin.ca
Example of a Toronto Asset Appraisal
These are the actual numbers and total that was included within a 20-page asset valuation report we did on a dry cleaning shop.
1. Union Dry Cleaning Machine HL-840-k (2018)
• A relatively recent model, indicating less wear and tear. Central to dry cleaning operations.
• Estimated value: $22,500
2. Fulton Gas Fired Steam Boiler FB-015-F (2011)
• Essential for producing steam, but its age suggests more significant depreciation.
• Estimated value: $8,000
3. Water conditioner Waterite 760
• Key for treating water, ensuring superior cleaning and prolonging equipment life.
• Estimated value: $1,750
4. Air Compressor Eagle
• Supports various pneumatic operations in the business.
• Estimated value: $2,500
5. Vacuum Rema
• Assists in streamlining the cleaning process and maintaining other equipment.
• Estimated value: $1,200
6. Water Heater Rheem
• Provides hot water essential for specific cleaning operations.
• Estimated value: $600
7. Steam Spotting Table Unipress SST
• Targets and treats stubborn spots on garments.
• Estimated value: $1,400
8. Utility all purpose press Unipress 42LX
• Versatile pressing equipment suitable for various garments.
• Estimated value: $2,800
9. Utility legger press Unipress 46x
• Designed especially for pressing pants and similar items.
• Estimated value: $2,600
10. Air Steam Form-Finisher Unipress ASF
• Offers a final finish to garments, enhancing their post-cleaning appearance.
• Estimated value: $3,000
11. 3 Part Puffer Unipress P1-3
• Essential for finishing garments that can't be traditionally pressed.
• Estimated value: $1,500
12. Single Puffer Unipress P1-1
• A more specific version of the 3-part puffer for distinct garment types.
• Estimated value: $800
13. Washer LG
• Modern washing machines integral to the cleaning process.
• Estimated value (each): $500 x 2 = $1,000
14. Dryer LG
• Enables efficient drying post-washing, prepping garments for pressing.
• Estimated value: $600
15. Sewing Machine (industrial) Juki DDD-555-4
• Enables garment mending and alterations.
• Estimated value: $1,200
16. Overlooker (industrial) Juki Mo-2512
• Used for refining garment edges, providing a professional finish.
• Estimated value: $1,100
17. Blind stitches (industrial) BENZ 816
• Delivers a seamless stitch essential for certain garment repairs.
• Estimated value: $900
18. 38ft Double conveyer
• Organizes and stores cleaned garments efficiently.
• Estimated value: $2,500
19. 3 roll bagger
• Facilitates packaging of cleaned garments for clients.
• Estimated value: $350
20. Slick rail system
• A garment handling system crucial for efficiency and organization.
• Estimated value: $1,400
21. Front Counter & Tagging counter
• The primary customer interaction point, central to operations and service management.
• Estimated value: $800
22. Computer & Printer
• Facilitates business operations, billing, and customer management.
• Estimated value: $1,000
23. Scale cart
• Useful for handling larger garment or linen volumes.
• Estimated value: $250
24. Laundry carts
• Vital for transporting garments within the establishment.
• Estimated value (each): $100 x 7 = $700
25. Refrigerator
• Essential for staff amenities and possibly storing specific cleaning agents.
• Estimated value: $400
Total Estimated Value: $63,850
These estimates are grounded in general industry standards, typical depreciation rates, and local market conditions in a particular city.
Top 20 dry cleaners in Toronto
|
Rank |
Dry Cleaner Name |
Address |
Services Offered |
Notable Features |
|
1 |
Gibson’s Cleaners |
Toronto, ON M6S 1N9 |
Dry Cleaning, Pickup & Delivery |
Uses eco-friendly GreenEarth Technology |
|
2 |
Esplanade Cleaners |
25 The Esplanade, Toronto, ON M5E 1W5 |
Dry Cleaning, Repairs, Alterations |
Reasonable prices, quality service |
|
3 |
1421 Yonge St, Toronto, ON M4T 1N0 |
Dry Cleaning, Delivery, Wedding Dress Care |
Online estimates, personalized service |
|
|
4 |
Sun Dry Cleaning And Professional |
673 Lansdowne Ave, Toronto, ON M6H 3Y9 |
Dry Cleaning, Alterations, Repairs |
Friendly service, affordable pricing |
|
5 |
Luna Dry Cleaning |
388 Richmond St W UNIT 1, Toronto, ON M5V 3P1 |
Dry Cleaning, Alterations, Wedding Dress Care |
Fast service, attention to detail |
|
6 |
Village Custom Cleaners |
122 Saint Patrick St, Toronto, ON M5T 2X8 |
Dry Cleaning, Garment Alterations |
Professional service, reasonable prices |
|
7 |
Soletta Dry Cleaners |
434 Richmond St W (at Spadina Ave.), Toronto, ON M5V 1Y1 |
Dry Cleaning, Alterations, Wedding Gown Care |
Family-owned, on-site services |
|
8 |
Exton Dry Cleaners |
200 Wellington St W, Toronto, ON M5V 3C7 |
Dry Cleaning, Wash & Fold, Alterations |
Convenient location, quick turnaround |
|
9 |
390 Dupont St, Toronto, ON M5R 1V9 |
Dry Cleaning, Pickup & Delivery |
Personalized service, high quality |
|
|
10 |
193 Roncesvalles Ave, Toronto, ON M6R 2L5 |
Dry Cleaning, Wet Cleaning, Wash & Fold, Alterations |
Over 50 years of experience, on-site service |
|
|
11 |
North York's Premium Dry Cleaners |
4664 Yonge St, North York, Toronto, ON M2N 5M1 |
Dry Cleaning, Laundry, Alterations, Shoe Repair, Wedding Gown Cleaning |
Over 45 years of experience, eco-friendly solvents, free home or office collection and delivery |
|
12 |
Empire Dry Cleaners |
42a Rexdale Blvd, Toronto, ON M9W 5Z3 |
Dry Cleaning, Tailoring, Alterations, Household Items Cleaning, Wedding Dress Preservation |
Over 25 years in the industry, eco-friendly machines, free pickup and delivery services |
|
13 |
Dove Cleaners |
Toronto, ON |
Dry Cleaning, Restoration, Alterations, Consignment |
Canada's largest high-end dry cleaning company, leader in green dry cleaning |
|
14 |
Ashford Cleaners |
535 Eglinton Ave W, Toronto, ON M5N 1B5 |
Dry Cleaning, Laundry, Tailoring |
Over 30 years of experience, family-run business, boutique feel |
|
15 |
Sun King Cleaners |
35 Bathurst St, Toronto, ON M5V 2P5 |
Dry Cleaning, Laundry, Tailoring, Alterations |
Nearly 50 years in business, organic non-toxic cleaning products |
|
16 |
Parkers Dry Cleaners |
Toronto, ON |
Dry Cleaning, Wash 'n' Fold, Luxury Clothing Care, Home Furnishings Cleaning |
Over 140 years of experience, free pickup and delivery service |
|
17 |
King & Parliament |
404 King St E, Toronto, ON M5A 1L4 |
Dry Cleaning, Alterations, Garment Pick-Up, Delivery Services |
Over 15 years of service, high level of cleaning expertise |
|
18 |
The Dry Cleaner |
650 Dupont St, Toronto, ON M6G 4B1 |
Dry Cleaning, Laundry, Alterations, House Textiles and Linens Cleaning |
Provides extraordinary care for fine garments and fabrics |
|
19 |
Exclusive Dry Cleaners |
Toronto, ON |
Dry Cleaning, Tailoring Services, Pickup & Delivery |
Free pickup and delivery to home and office, contactless service |
|
20 |
Eco Cleaners |
Toronto, ON |
Non-Toxic Dry Cleaning, Pickup & Delivery |
Toronto’s first non-toxic dry cleaners, uses GreenEarth Cleaning Technology |
We don't know if any of these dry cleaners are for sale but we would be happy to contact them and see if they would be willing to sell to you at fair market value.
877 355-8004 - pindotca@gmail.com
Projection for combining a dry cleaning business with wash-and-fold, pickup, and delivery services
Here is a comprehensive analysis of the costs, space requirements, equipment, and revenue potential for combining a dry cleaning business with wash-and-fold, pickup, and delivery services.
1. Additional Space Requirements
To accommodate wash-and-fold services, pickup, and delivery, the space needs to be optimized for storage, sorting, and customer logistics.
A. Additional Space Needs
|
Space Type |
Additional Space Required (sq ft) |
Purpose |
|---|---|---|
|
Sorting & Processing Area |
300 - 500 sq ft |
Space to sort and process customer laundry |
|
Delivery Pickup & Staging |
150 - 300 sq ft |
Staging area for outgoing and incoming orders |
|
Storage Space |
150 - 250 sq ft |
Storage for sorted laundry, packaging, and supplies |
|
Employee Break Area |
100 - 200 sq ft |
Breakroom for employees handling wash-and-fold tasks |
|
Total Additional Space |
700 - 1,250 sq ft |
Additional space required for combined services |
New Total Space Requirement:
- Original Dry Cleaning Space: 1,500 sq ft
- Additional Space for Wash & Fold, Pickup/Delivery: 700 - 1,250 sq ft
- Total Required Space: 2,200 to 2,750 sq ft
2. Leasehold Improvements
To support wash-and-fold services, additional leasehold improvements are needed.
|
Category |
Description |
Estimated Cost (CAD) |
|---|---|---|
|
Flooring & Wall Modifications |
Durable flooring, water-resistant areas |
$10,000 - $25,000 |
|
Plumbing Upgrades |
Drainage, water supply for washers |
$15,000 - $30,000 |
|
Electrical Upgrades |
Power upgrades for large washers/dryers |
$10,000 - $25,000 |
|
Lighting & Ventilation |
Ventilation for moisture control |
$5,000 - $10,000 |
|
Customer Pickup Area |
Shelving, storage, order processing area |
$5,000 - $15,000 |
|
Delivery & Staging Area |
Space for packaging and bagging orders |
$5,000 - $10,000 |
|
Break Room & Storage Area |
Employee breakroom, inventory storage |
$5,000 - $10,000 |
|
Total Leasehold Improvements |
For wash-and-fold, pickup, and delivery |
$55,000 - $125,000 |
Revised Total Leasehold Improvements:
- Dry Cleaning Improvements: $225,000 - $450,000
- Wash & Fold Improvements: $55,000 - $125,000
- Total Leasehold Improvements: $280,000 - $575,000
3. Equipment & Machinery
Wash-and-fold services require additional equipment beyond standard dry cleaning machinery.
|
Category |
Equipment Description |
Estimated Cost (CAD) |
|---|---|---|
|
Commercial Washers |
Large-capacity commercial washers |
$15,000 - $50,000 |
|
Commercial Dryers |
High-capacity gas/electric dryers |
$10,000 - $40,000 |
|
Folding Tables |
Stainless steel folding tables |
$1,000 - $3,000 |
|
Laundry Carts |
Carts for transporting laundry |
$500 - $2,000 |
|
Shelving & Racks |
Shelving for finished laundry |
$2,000 - $5,000 |
|
Packaging Equipment |
Bags, wrapping, and sealing machines |
$2,000 - $4,000 |
|
Labeling & Tagging |
Labeling system for wash-and-fold orders |
$500 - $1,500 |
|
Total Equipment Cost |
Equipment for wash-and-fold service |
$31,000 - $105,500 |
Revised Total Equipment Costs:
- Dry Cleaning Equipment: $150,000 - $450,000
- Wash & Fold Equipment: $31,000 - $105,500
- Total Equipment Costs: $181,000 - $555,500
4. Working Capital
With wash-and-fold services, you’ll need additional inventory and cash reserves for operational costs.
|
Category |
Description |
Estimated Cost (CAD) |
|---|---|---|
|
Extra Supplies |
Soaps, detergents, bags, etc. |
$5,000 - $10,000 |
|
Increased Operating Cash |
3-6 months of expenses (rent, wages) |
$25,000 - $50,000 |
|
Total Working Capital |
To operate wash-and-fold service |
$30,000 - $60,000 |
Revised Working Capital Needs:
- Dry Cleaning: $55,000 - $110,000
- Wash & Fold: $30,000 - $60,000
- Total Working Capital: $85,000 - $170,000
5. Revenue Potential
The addition of wash-and-fold and delivery services can significantly increase revenue for the business.
|
Revenue Source |
Estimated Annual Revenue (CAD) |
|---|---|
|
Original Dry Cleaning Sales |
$252,800 - $750,000 |
|
Wash-and-Fold Services |
$150,000 - $400,000 |
|
Delivery & Pickup |
Service fees and delivery surcharges |
|
Total Annual Revenue |
$477,800 - $1,300,000 |
6. Expected Profit Margins
With the increased services, profit margins are expected to improve.
|
Category |
Revenue (CAD) |
Net Profit % |
Net Profit (CAD) |
|---|---|---|---|
|
Original Dry Cleaning |
$252,800 - $750,000 |
6.8% - 15% |
$17,198 - $112,500 |
|
Wash-and-Fold |
$150,000 - $400,000 |
10% - 20% |
$15,000 - $80,000 |
|
Delivery & Pickup Fees |
$75,000 - $150,000 |
20% - 30% |
$15,000 - $45,000 |
|
Total Combined Profit |
$477,800 - $1,300,000 |
10% - 25% |
$47,798 - $237,500 |
7. Total Setup Costs
|
Category |
Low Estimate (CAD) |
High Estimate (CAD) |
|---|---|---|
|
Leasehold Improvements |
$280,000 |
$575,000 |
|
Equipment & Machinery |
$181,000 |
$555,500 |
|
Permits, Licenses & Compliance |
$3,500 |
$8,500 |
|
Working Capital |
$85,000 |
$170,000 |
|
Total Setup Costs |
$549,500 |
$1,309,000 |
Summary of Costs & Profits
|
Category |
Amount (CAD) |
|---|---|
|
Total Setup Costs |
$549,500 - $1,309,000 |
|
Annual Revenue |
$477,800 - $1,300,000 |
|
Net Profit (Annual) |
$47,798 - $237,500 |
|
Break-Even Point |
2 to 5 years |
By combining dry cleaning, wash-and-fold, and pickup/delivery, revenue potential increases dramatically. Revenue could nearly double, and profitability improves due to higher-margin services.
Toronto business valuation questions and answers
This is the text version of a podcast we did for Toronto business valuation questions and answers.
Sage: Welcome to another episode of 'Business Valuation Insights.' Today, we're diving into the top questions people have about business valuation and appraisal. And who better to answer them than Eric Jordan, CPPA and founder of the '25 Factors Affecting Business Valuation' methodology. Eric, thanks for joining us!
Eric: Thanks for doing this, Sage. Excited to tackle these questions and hopefully clear up what goes into valuing a business accurately.
Sage: Alright, let’s get right to it. First question: How much is my business worth?
Eric: Great starting point! Send me a message, and within 15 minutes of our first conversation, I can usually give you a ballpark estimate and a quote for a full valuation or appraisal.
Sage: Quick and easy! Here’s another one: What experience should a business valuator have?
Eric: Hands-on experience owning and operating a relevant business for 10 or 20 years. That’s what it takes to understand and apply the '25 Factors Affecting Business Valuation' method that we use. It’s on my site, www.pin.ca, if anyone wants more details.
Sage: Good to know! Next up: How do I get a business appraisal?
Eric: Same as before—reach out to me, and we’ll get started. It’s simple.
Sage: What’s the best way to find out the value of my business?
Eric: Again, just send me a message. I’ll take it from there.
Sage: Sounds easy! Here’s one that comes up a lot: Where can I get a business valuation?
Eric: Well, you’ve already found it. Send me a message or go to pin.ca, and I’ll help you from there.
Sage: Perfect. And how can I find the fair market value of my business?
Eric: Same answer. Message me, and I’ll help you determine that.
Sage: Okay, let’s dig a bit deeper. Who does business valuations near me?
Eric: That would be me, Eric Jordan, CPPA. Just send me a message, and we’ll get connected.
Sage: Now, what affects the value of a business?
Eric: A few main things: your normalized net income, your tangible assets, and, most importantly, the intangible assets surrounding them. Give me a call at 877-355-8004 or email me, and we can go over it in detail.
Sage: Good points. Now, how much can I sell my business for?
Eric: Assuming you mean at fair market value, message me, and I’ll help you determine that. Or just email me at eric@pin.ca.
Sage: And what’s involved in a business valuation?
Eric: It starts with your financial info, then we apply the '25 Factors Affecting Business Valuation.' If possible, we also do a five senses inspection report for a thorough analysis.
Sage: How long does a business appraisal take?
Eric: Usually around 10 days.
Sage: And how much does it cost?
Eric: It can range from $1,500 to over $15,000, depending on complexity, but $3,500 is typical.
Sage: Got it. How do I know if my business is worth selling?
Eric: Great question. Give me a call, and we’ll talk it through. Sometimes, a business is worth little without the owner, meaning it’s hard to sell.
Sage: How can I increase the value of my business before selling?
Eric: Our valuation report can highlight areas to improve.
Sage: Can I get a business valuation for a bank loan?
Eric: Absolutely. I’ve got a good relationship with the Canada Small Business Financing Program, so we can help with that.
Sage: Is now a good time to get a valuation for my business?
Eric: Send me a message, and I’ll help you decide.
Sage: What do I need to get a business valuation?
Eric: Relevant information, and then an intake call with me to get us going.
Sage: How do I prepare for a business valuation?
Eric: Get in touch and gather your financial info for our review.
Sage: What documents do I need for a business appraisal?
Eric: Mostly financials, your lease, and a willingness to discuss intangible assets.
Sage: What’s included in a business valuation report?
Eric: A full report, possibly with a five senses inspection. I always send a sample when quoting.
Sage: What’s the difference between a business appraisal and a business valuation?
Eric: An appraisal often focuses on tangible assets, whereas valuation considers both tangible and intangible.
Sage: How accurate are business valuations?
Eric: Very accurate. Most businesses sell close to our valuation if they’re well-promoted.
Sage: How do I get a business valuation in Toronto?
Eric: Message or call me; we can usually complete it within 10 days.
Sage: Where can I get my business appraised in Toronto?
Eric: You’re already in the right place—send me a message or call 877-355-8004.
Sage: Are there business appraisers in my city?
Eric: Yes, my CPPA designation is recognized across Toronto.
Sage: Can I get my business appraised without selling it?
Eric: Of course. Message me, and I’ll explain why it’s still beneficial.
Sage: How do I find a good business valuator?
Eric: We believe our methodology is top-notch for private business assets.
Sage: How do I know if a business valuation is reliable?
Eric: Contact us, and we can share examples where our valuation matched sale prices exactly.
Sage: What should I look for in a business valuation expert?
Eric: Experience in running a business is key. It was covered in one of the earlier questions, too.
Sage: What’s the tax impact of selling a business?
Eric: Depends on whether it’s an asset or share sale.
Sage: How does a business valuation affect taxes?
Eric: Selling shares with a spouse may shield nearly two million dollars from capital gains tax.
Sage: Can a business valuation help me get financing?
Eric: Yes, especially with Canada’s $500,000 loan guarantee program.
Sage: What can I use a business valuation for?
Eric: Tax planning, sales, divorce, partnerships, expropriations, and planning.
Sage: How does a business valuation help with selling a business?
Eric: It provides a credible report that banks trust, making financing easier for buyers.
Sage: Is a business appraisal needed for partnership buyouts?
Eric: Not legally required, but very wise to ensure all parties are informed.
Sage: Can a business valuation help me plan for retirement?
Eric: Yes. Knowing your business’s worth is essential for retirement planning.
Sage: How do I get a valuation for a franchise business?
Eric: Same process. Reach out, and we can help with financing or sale.
Sage: How do you value a family-owned business?
Eric: Our method is especially suited for private, family-owned businesses.
Sage: How is a small business valued differently from a large business?
Eric: Private business values are unique compared to publicly traded companies.
Sage: What’s the process for valuing an online business?
Eric: Similar process, but with more emphasis on intangible assets.
Sage: What’s the best way to value a service-based business?
Eric: Using normalized net income, then applying our 25 factors methodology.
Sage: Do I need a business valuation for estate planning?
Eric: Definitely—essential for proper planning.
Sage: How is goodwill factored into a business valuation?
Eric: Goodwill has limited relevance in private business but is sometimes used in big company acquisitions.
Sage: How do you value intangible assets in a business?
Eric: Our 25 factors methodology specifically addresses intangible assets.
Sage: Thanks, Eric, for all this invaluable information. If you’re listening and want more details, visit www.pin.ca or reach out directly to Eric for help with your business valuation needs.
Eric: Thanks, Sage! I look forward to helping more business owners understand their value.
Eric Jordan, CPPA
877 355-8004
pindotca@gmail.com