Why you selling it? What type of business?
Have any of you guys sold or bought a small business in the past ? What's the rule of thumb concerning price ? How much would you be willing to pay for a successful small business..or how much would you sell yours for ? Just looking for some input.
Why you selling it? What type of business?
Have any of you guys sold or bought a small business in the past ? What's the rule of thumb concerning price ? How much would you be willing to pay for a successful small business..or how much would you sell yours for ? Just looking for some input.
its usually based on EBITAD
USUALLY 2 TO 3 TIME THIS CALCULATION BASED ON THE TYPE OF BUSINESS AND CASH FLOW
Why you selling it? What type of business?
Well, I haven't decided if I'm selling just yet..but thinking about it. I manufacture custom shade canopies & prop covers.
its usually based on EBITAD
USUALLY 2 TO 3 TIME THIS CALCULATION BASED ON THE TYPE OF BUSINESS AND CASH FLOW
EBITAD?
It is a portion or multiple of the revenue it brings in....it depends on what it is, and how "good" of a business it is....
EBITAD?
Earnings Before Interests Taxes Amortization and Depreciation
Have a business valuation done and go from there... Service businesses, like landscaping or pool routs, are a little different. You buy accounts for between 3 or 4x their monthly fees..
I was around when my father bought a small fab shop. It's actually pretty difficult to come up with a price. Things like customer lists, vendors and what not have to come into consideration and there is no way to put a price on things like that. The price for those things generally get pulled from "thin air". Basically it just boils down to how much you "feel" is appropriate and what the potential buyer will pay.
You could also use the pro forma method. It has a revenue multiplier in it but I don't believe in it!! You could go to bizben.com and see what other business's go for.
Good luck