Your log home manufacturer is going to give you a quote for package. Many people want manufacturer to quote on a "turnkey" house or at least a weathered-in shell, as a matter of convenience. However, this might not be way to go if you live in a different state from mill. Do you really want to pay shipping for plywood? In end, having your contractor purchase lumber locally could save you thousands of dollars, even it it's a little less convenient to calculate it initially. Your local builder will gladly give you a quote as long as he has a good set of preliminary plans to work from.

I started with a simple check list to sort out my budget. Luckily, I found a contractor who was willing to take over project and hire his own subs; his itemized quote helped me visualize all elements that went into project. Then I added subs that I hired separately (excavator, mason, landscaper, etc.). Here are some line items that went on checklist: Air Conditioner, Appliances, Builder's Profit, Doors (interior), Doors (exterior), Driveway, Electrician, Fireplace, Flooring, Foundation, Furnace (or Boiler), HVAC Installation, Insulation, Interior Trim, Kitchen, Labor, Landscaping (Grass seed), Lift equipment, Lighting Fixtures, Logs, Lumber (plywood, joists, 2x6s), Mason, Permits, Plumbing, Plumbing Fixtures (sinks, bathtubs, toilets), Roof, Sanding and Staining, Septic, Staircase (if not included in log quote), Tiles (kitchen & bath), Utilities, Well, Windows.

Depending on your job site, you may have other expenses. If flatbed truck carrying your logs cannot make it to site, you'll have to make provisions to off-load logs elsewhere and have them brought in. If you are set way back from road, you may have to pay for telephone poles, or pay for trenching. Also, your builder may require that you bring power to site for his tools (most allow you a few days of generator power, but not for whole job).

It took a while to fill in all blanks on my check list, but once I started looking at each task individually, project as a whole made sense. Actually, log package was easiest part to deal with. In our case, manufacturer provided logs only (and design), which came out to less than 1/6 total cost of house (not counting land work). For rest, costs are like any other custom home; then question becomes "Who does what?". After all, a little sweat equity goes a long way.

Break Even In this category, business is marginally profitable or losing money. In this type of transaction, buyer is more interested in fixed assets, location, lease terms, and cost of converting existing business to their intended use. In Break Even transactions, Market Value is determined by combining value of furniture, fixtures, and equipment (including consideration for installation), leasehold rights, tenant improvements, with some consideration for gross revenues. Break Even Market Value is sustainable only if business is operational, and owner has financial ability to continue operating until sale is closed.

Asset Sale This category is comprised of closed businesses or businesses that are experiencing extreme circumstances. An extreme circumstance may include a seller who does not have financial means to continue operating. It may also be a secured creditor or landlord whom has had to repossess a business, or it may include a business owner being forced to sell for reasons beyond their control. Any of these situations create a severe disadvantage to seller, and in turn has a dramatic effect on Market Value. In these situations, value drops to that of auction value for fixed assets, plus whatever premium might be negotiated for location, leasehold rights, and fact that equipment is in place and operational.

Other Considerations In addition to cash flow, tangible and non-tangible assets of business will influence Market Value. These tangible and non-tangible assets may include Furniture, Fixtures and Equipment; Leasehold rights; and Books and Records. Although not quite as important as profitability, these other assets will directly affect Market Value.

Whether you are evaluating a purchase price, planning for succession or positioning your business for sale these other assets should be considered. But is should always be remembered that bottom line for determining actual value of your restaurant business is simple answer: what a willing and able buyer agrees to pay!

Written by Monte Zwang of Steele Development Corporation, a consulting firm specializing in business development and financial strategies. You can reach Steele Development by calling 206.878.9666 or online at www.Steeledevelopment.com.