Sell a Business

How to Value a Business

There are basically two methodologies used in valuing businesses:
1. Traditional Businesses
    Business Value= Profit x Selling Multiple of the Profit
    These are more traditional businesses where: “Maximizing profit
    maximizes business value” – all assets (including stock and
    equipment) used to generate profit are included in the business
    value / sale price.
    Our ‘Ready For Sale’ strategies often increase the profit /
    business value – read more at under
    the ‘Selling your Business’ heading
2. Recurring Revenue Businesses
    These businesses include real estate rent rolls, accounting and
    legal firms, financial planning firms (less of these lately) where
    the selling multiple is applied to INCOME (or fees) not PROFIT.
    These businesses are seen as fairly defensive investments (due to
    recurring revenue streams). If they were valued on PROFIT not
    INCOME the selling multiple would be alot higher.
    Multiples of profit or income vary from industry to industry.
    If you’d like more information about selling multiples make a comment below or PM me.

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