Entrepreneurship Case

Mr. Bernard has been operating his own canteen at ABC University for the past 15 years. This canteen serves breakfast and lunch at reasonable prices. Last month, Mr Bernard had received his permanent residence status from the Australia government. He plans to sell off his canteen business and migrate to Australia to stay with his family there.

Upon hearing rumors that Mr Bernard is contemplating a sale of the canteen at ABC University, your boss approached Mr Bernard to discuss the possibility of purchasing the canteen. Mr Bernard offered to sell the canteen for the price of RM500,000.

Since your boss is not sure whether it is a good buy at RM500,000. He asked you to give him a business valuation report for this canteen at ABC University.

Your boss has given you the following information that he obtained from Mr Bernard and some other sources:

a. Currently, ABC University has 10,000 students

b. Most of the equipments, furniture and tools are bought about 5 years ago

c. Currently, Mr Bernard is the manager and he has 10 staffs working under him. The

staff turnover rate has been low, with 80% of them has been working here for more

than 5 years

d. Mr Bernard still has 6 years rental contract with the university and this contract will

remain effective for anybody who takes over from Mr Bernard with the condition

that university agree with it. The rental per month is RM6000.00

e. There are no other competitors within 3km from the University