How to Value a Small Business

[saceo007]

Ever wondered about how small businesses are valued?

One of my clients, Steven Schlagel, CPA, CVA, CFP, JD has just completed a guide that is helpful to entrepreneurs in learning how small businesses are valued. We are interested in gathering some useful feedback on the guide and would like to make it available - via email or download - to anyone who might be interested.

In exchange for your free copy, we ask that you complete a brief four question survey at the end of the guide. If you have any further questions, please feel free to PM me.

[barbaragabogrecan]

This definitely does help. Thanks so much for this great post; this is the kind of thing that keeps me though out the day. I am planning to start small business.

[saceo007]

barbaragabogrecan, thanks for the compliment. Can't wait to get your feedback on the survey!

[Emma Ames]

Now, this is interesting. I would love to know what you have come up so far for this guide. This sure could come in handy for a lot of businesses out there. Looking forward to it.

Best,

[forseon]

Valuing a small business can depend on many important factors. Most importantly if it is a service or a retail business. If it is a service business that has contracts, the business's value depends on that because most contracts are based on relationships which is something intangible. Usually it also depends on the business and how much the owner has to be involved. If it is an absentee owner business like a car wash or a laundromat, the multiple is higher.

The multiple is the number that is multiplied by the net to get the asking price.

For example: If a business is selling for $500,000 and the net profit of that business is $250,000. It is selling at a multiple of 2

[jayseo]

Interesting compliment sound great feel to read.