Question

How can one calculate the selling price of a business?

Answer 1

One of the simple rule of thumb is 2 x total yearly turnover. This means if your yearly turnover is US$1million, it may be possible to sell at US$2million. However, there are other additional parameters like profitability, loans & liability, growth prospects, customer base, brand value, etc. If you are really serious, involve a company to do a vaulation for you, for example KPMG.

Answer 2

When we were looking to purchase our business... we desided we wouldn't spend more than twice the annual earnings of the company... It all would depend on the type of business as well.. . To sell the business you may want to list it in the business opps section of your classifieds (or even try ebay... you can sell anything on ebay)

Answer 3

should think first short term or long term business.if short term biz n catchy product u could high the price n if the long term biz u do first bep level then increase the quantity of product.

Answer 4

It mainly depends on folloing factor:. What is the growth rate your company has done in previous year.. How many companies are there in market with similar products/services?. where you stand?. What is the industrial growth rate?. If you do a proper SWOT analysis you can come to a better bargaining position for selling youer business.. . Sometimes after evaluating all the different senario it is better not to sell at the particuler movement.

Answer 5

i used a broker who only handled transactions of companies in my type of business. he was an expert at pricing them and finding buyers who could qualify for a loan, thereby giving me all cash. he helped get the loan through for the buyers and made me a happy camper. first buyers he brought to me made the deal.. . btw - he priced the business at twice what i thought it was worth.

Answer 6

If the business is a service business, and you are essential to the business then it will be tougher to get a good price. If it is a product sales business where you are less important then 3 times net profit is a good place to start. This would only apply if the business is at least three years old and you can predict profit in the coming year such that you would condition your asking price based on a 'relative' guarantee of sales and profits. . . There are many business brokers out there who sell businesses professionally. . . I'm looking for a business at the moment. I am not a broker. Are you California based? If so contact me at [email protected]

Answer 7

Hire a business broker, like a realtor only with business