If you own a small business, what is the correct way to figure your business' worth to sell it?


Question:


Answers:
Hi, Ron S
Small business is too big business.
You can find a way to reach wise your business.
Look around this site
http://www.vocalix.com/?r=7048
is correct answer.
good luck
that is very subjectivei would start with the paper value of your company your take your assets subtract your debts and that gives you the paper value of your company. then there is something called goodwill. this is the value of your name and reputation. what is that worth. also consider the future value of the company and what you may be losing out on by selling. take all this into consideration when negotiating a selling price for your company.
if it is retail price sometime goes by sales.
My is sold by earnings/profits say 5 times earnings.
A small business is worth somewhere between it's breakup value, (That's what's left after you auction all the assets and pay off all the bills and expenses.) and a rational multiplier of net income or profit usually before taxes and interest expenses.
The multiplier is very much dependent on the type of business. For example let's say in xyz type of business the multiplier is 4 so a business grossing 2 million in sales, with a profit of 200 thousand per year would be worth 800 thousand provided the facilities, equipment and fixtures were in average condition.
You can go to this site and see examples of all sorts of businesses for sale with their gross, profit and asking price listed from that you can begin to discern the ratios or multipliers and how they apply to each area of business:
http://www.businessesforsale.com/...
Good luck, I love business and those it interests.

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