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source by: businesstown.com

Quick Valuation Guidelines


1. An extremely well-established and steady business with a rock- solid market position, whose continued earnings will not be dependent upon a strong management team.

 

A multiple of eight to ten times current profits

 

2. An established business with a good market position, with some competitive pressures and some swings in earnings, requiring continual management attention.

 

A multiple of five to seven times current profits

 

3. An established business with no significant competitive advantages, stiff competition, few hard assets, and heavily dependent upon management’s skills for success.

A multiple of two to four times current profits

 

4. A small personal service business where the new owner will be the only, or one of the only, professional service providers.

A multiple of one times current profits.

 

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