Special circumstances of the particular buyer and seller. Tradeoff between cash and terms. Relative tax consequences for the buyer and seller, which depend on how the transaction is structured. The definition of fair market value is the price at which property would change hands between a willing buyer and a willing seller, both being adequately informed of all material facts and neither being compelled to buy or to sell. In the market place. buyer and seller are nearly always acting under different levels of compulsion.
Formulas exist for many businesses.
They are originally calculated as a percentage of either sales or asset values, or a combination of both. Rarely if ever are two businesses truly comparable. However, businesses in the same industry do have some characteristics in common, and a careful contrasting may allow a conclusion to be drawn about a range of value. This approach calls for the assets of the business to be valued. It is most often used when the business being valued generates earnings primarily from its assets rather than the contributions of its employees or when the cost of starting a business and getting revenues past the break-even point doesn't greatly exceed the value of the business's assets.