Multiply the annual salary you'll receive by a factor of from 1 to 3 based on your assessment. The higher the number, the more secure and profitable the business. Once you have a value, make an objective review. Calculate this by subtracting the fair market value of tangible assets from investment value. Hesitate if the goodwill is more than your down payment or a salary you hope to receive.
Business valuation is difficult to master, and there's more to it than what's written here.
But as your ability develops, you won't waste time on unprofitable opportunities and you'll learn to recognize a good deal when you see one. Chad Simmons is an author, consultant and entrepreneur. Please take a moment to visit our sponsors.