Ask 10 professionals to place a value on your business, and you'll get 10 different answers. With that said, there are industry standards on how to assess a business' value. We employ the California Association of Business Brokers standard for valuations with some additional adjustments or fine tuning. We calculate business value based on Seller's Discretionary Earning, which is calculated by taking your Net Operating Income and adding back one-time charges that the seller has optionally paid for, that is not a contributing factor to revenue. From there, we apply a multiplier by comparing recent sales and other like businesses for sale. Further adjustments are made based on employees, fixtures, furniture, equipment and forecasts for the industry the business is in. It's not exact science, but if done well, it's highly accurate and effective. A good business Broker will offer their suggestions on selling price and make adjustments based on your motivation and time frame. A great Broker will not take your listing if they feel your expectations are unrealistic. Some Brokers will take as many listings as they can to play the numbers game. Article coming soon regarding this. What I call the disappearing Broker. Contact us for a complimentary business value assessment.