I’m entertainig the idea of selling the company that I started three years ago. It is a registered Corporation, and I am the only employee. The company is highly portable. Is there a set of, or given assumption of, equations that dictate what a fair price for a business is? Something along the lines of:
Past Years’ Combined Revenues minus Current Debt, multiplied or divided by some other factors.
Also, what is the best practice of finding a prospective buyer?
Ebay? Something in my local paper? Does this fall under an Estate Sale?
This is not a solicitation, but I will entertain offers.
There was a thread about this in GQ not to long ago: How do I value a small business? I’m not sure it answered the OP’s questions or the exact question you’re asking here, but it’s a start on a place to look.
Out of curiosity, can you say what type of business it is and why you’re selling?
This was an excellent link submitted by jk1245 in the other thread. I even breaks it down by type of business. But, I noticed that nowhere does it talk about factoring in the debt of the business.
In my situation, it is a home business that does IT Services for residential and small business customers. Revenues have been steadily climbing since the inception of the company, but so has debt. Basically, if I were to just dissolve the company, and liquidate the assets, I would probably break even.
Of course, the only rule of thumb with how much something is worth, is how much someone else is willing to pay for it.