Selling a business is a complex process and can be daunting for business owners. As an expert business broker, I understand the importance of getting a fair price for your business and the need to understand how much a business is worth and what you should expect to receive in return for your years of hard work. In this article, I will answer the question: how much do you sell a company for?

How Much Do You Sell a Company For?

A business will likely sell for two to four times seller’s discretionary earnings (SDE)range –the majority selling within the 2 to 3 range. Typically, the selling range for small businesses is between two-times and three-times earnings. Outliers may be multiples of one-time or less. In order to sell your business, you must first find out what it’s worth by tallying the value of the assets, doing a discounted cash flow analysis and much more. In most cases, people can determine their online business value by multiplying their average monthly net profit by 36x – 60x. For example, if a business generates $10,000 in monthly net profit, it will likely sell for $360,000 – $600,000. Depending on the size of the deal and the industry, that can range from 2-10 times the profit. Smaller businesses (under $3M in price) generally sell for lower multiples than bigger businesses.

In doing some research, I have always read that a general rule of thumb for selling a business is 2-3 times net profit. In using that example, the biz you use to generate $10,000 monthly net profit would likely sell for $200,000 – $300,000.

Conclusion

Selling a business can be a daunting process, but understanding how much a business is worth is the first step in achieving a fair price for your business. As a general rule of thumb, small businesses typically sell for two-times to three-times net profit, but depending on the size of the deal, industry and other factors, this can vary. If you have questions about selling your business, Atlantabusinesses.com is an excellent resource to find answers to all your questions about selling a business and finding a business broker.

What is the value of a business with $1 million in sales?

The value of a business with $1 million in sales varies depending on how profitable it is and what assets it has. Generally, the worth of the business is equal to one to five times its annual sales. Therefore, the business in question would likely be valued between $1 million and $5 million.

What is the value of my business for sale?

To calculate the value of the business, one needs to take the sum of all the possessions the business owns, such as equipment and inventory, and subtract any debts or liabilities. This gives an initial figure of the company’s worth.

What are the three methods of assessing the worth of a company?

The three main valuation methods used by professionals when assessing the value of a company as a functioning entity are DCF analysis, comparison with analogous companies, and precedent deals.

What is the value of a small business?

Buyers must look at a small business acquisition as if it were a job purchase. Usually, businesses in which the owner is actively engaged will be valued at 2-3 times the annual income of the company. For example, a business that generates $100,000 in yearly revenue should be priced between $200,000 and $300,000.