Value a Small Business

To value a small business a business valuer needs accurate sales evidence. The sales evidence to value a small business should be of similar-sized businesses sold recently and in the same locality as the subject business.

It is important that the sales evidence calculates the profit of the business being valued in the same profit method as that of the comparable value of small businesses in the sales data set. If they are based on one single owner-operator profit in the business (PEBITDA) then the subject business should also base its profit on an owner-driven profit, not a couple and not a business run under management.

To value a small business successfully the valuer should carefully examine the lease document, the franchise agreement, and the staffing situation as well as the branding, presentation, and product or service offering. One size does not fit all, no matter how small the business, it deserves a thorough value a small business report which is a comprehensive review of the business and its marketable value.

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The contents do not constitute legal advice, are not intended to be a substitute for legal advice, and should not be relied upon as such for any purposes. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.