A valuation might be appropriate for a larger business, but the marketplace still almost always determines what a seller will get. And not one of them is perfect. Most valuations are based on a multiple of cash flow, and there are accepted rules of thumb for all kinds of small businesses, in all types of industries. They're not precise, but they can provide a good sanity check. Keep in mind, however, that the numbers are not the only factor to consider.
Some businesses are more in demand than others.
Using outside professionals when you're buying or selling a business can be invaluable. When in doubt, talk to someone who owns a similar but noncompetitive business. The information you receive will be well worth the cost of the lunch or dinner. All rights reserved.