But there are some basic concepts that every seller and buyer should know. Whether you're buying or selling a business, the focus must be on future benefits. Projecting future earnings is required homework. Rules of thumb must be viewed with skepticism.
Nobody really knows what a business is worth until they do detailed homework.
Taking control of the situation yourself is the best strategy. The value of a business is based on the value of believable future projections of earnings or other benefits. Most small business buyers want to buy themselves a job, a lifestyle and a reasonable return on investment. Even larger buyout groups look to find a reasonable return on investment and know they have to budget a reasonable amount for a manager's job and lifestyle. In most small companies, the owner is also the manager.