Calculating your business value typically involves a few common methods:
Earnings Multiplier: Multiply your annual net profit by an industry-specific multiple (often 2x to 5x for small businesses).
Revenue Multiple: Use a percentage of annual revenue, common in early-stage or high-growth companies.
Asset-Based Valuation: Total assets minus liabilities, useful for asset-heavy businesses.
Discounted Cash Flow (DCF): Project future cash flows and discount them to present value.
Most business owners use a combination of methods and consult a professional appraiser or accountant for an accurate, defensible valuation.