What is your business worth? The short answer, of course, is whatever someone will pay for it. The longer answer is: it depends. It depends on your industry, it depends on your profitability. It depends on a multitude of factors. One of the valuation techniques being taught by the International Business Brokers Association is called the Multiple of Discretionary Earnings Method. It consists of 10 value drivers, each given a weighted score, that when combined estimates the multiple of earnings that a business would be valued at. These drivers include historical profitability, income risk, terms of sale, the business type, historical growth, location, marketability, desirability, competition and the industry....
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- Aug 15, 2014 |
- Tags: Business Valuation, Business Value, Business Worth, Selling Business |
- Posted in: Selling Your Business
Steve Barnett, CPA, MBA, CBB, CBI
Steve Barnett has broad experience advising small and middle-market businesses. Before becoming a business broker, he served as a CFO, Controller, and Vice President of Finance for manufacturing and professional services companies across the aerospace, consumer products, banking, and staffing industries. Known as “The Valley Business Broker,” Steve serves business owners throughout Southern and Central California, including Los Angeles, Ventura, Santa Barbara, and San Luis Obispo counties.