Are you looking to sell a business and are unsure of how much it is worth? You have come to the right place! This article will explain how much you can expect to sell your business for and what factors influence the sale price.

How Much Can You Sell a Business 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 has an average monthly net profit of $10,000, the value of the business will likely be between $360,000 and $600,000.

Depending on the size of the deal and the industry, the sale price can range from 2-10 times the profit. Smaller businesses (under $3M in price) generally sell for two to three times their profit.

You may have heard of businesses selling at “x times earnings”. This can be quite subjective. When buying a small business, every buyer wants to feel they are getting a good deal. Therefore, they may negotiate the price down. This is why it is important to factor in market conditions and trends when determining sale price.

Selling a business can be a lengthy process, and it is important to have the right resources and support when you are looking to sell. Atlanta Businesses is a great resource for answers to all your questions about selling a business and about business brokers. Visit atlantabusinesses.com to learn more.

What is the typical selling price of a business?

A company is likely to be sold for a multiple of two to four times its seller’s discretionary earnings (SDE). Most businesses tend to be sold within the 2 to 3 SDE range, meaning that if the cash flow for the year is $200,000, the selling price is likely to be between $400,000 and $600,000.

What is the value of my business if I choose to sell it?

The business value is what you would have left if you sold all your
assets and paid off all your liabilities.

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

The worth of a business with $1 million in sales cannot be precisely determined because it depends on the profitability and resources of the business. Generally, a business is valued at one to five times its yearly sales, which would make the value of this particular business anywhere from $1 million to $5 million.

What is the asking price for a small business?

The value of a small business is usually determined by the amount of money it earns each year. If the owner is heavily involved, it will usually sell for two to three times the annual earnings. For example, if the company earns $100,000 annually, it is likely to be valued at $200,000 to $300,000.