Don’t you want to know what your business is worth?
There’s a variety of ways for a business to be valued. It can be based on gross revenues, net revenues, EBITDA, net revenues plus depreciation, profits plus owner benefits, monthly/annual recurring revenue, assets, or some other factors. Once a method of calculating is determined, a multiple may be applied. For example, you may have heard of someone saying “I sold my business for 3 times EBITDA.” That means they got a 3x multiple. Depending on the quality of your revenues and business, you could see a 1x multiple or a 10x multiple.
If you want to get the highest valuation for your business, you must have good financials and a business that can run without you. If the business would collapse if you left, it’s not worth much to a buyer. But, if you can show that your business continues to run and continues to bring in revenue even when you’re not there, it’s a much more interesting business to a buyer.
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