How much is my business worth?

Question

I'm not saying it does - But if my business made 2.5 million profit a year on 3 million turnover. The business has little assets and not much of a brand name. Around how much would it be worth if I sold it?
Thanks
Tom

Answer 1

would depend entirely on how many years you have been trading, if for example you had hit on a one hit wonder and made that fantastic profit, but was now fading, then its not worth anything at all!! however if you have built up over a period of time a good level of business then you would be talking i would expect around £150,000 if its just started, to £500,000 if its been going a while and vaguely established

Answer 2

It is very difficult to accurately value a company, the only real way to establish value to an outside investor is to sell the business. However there are many companies (mine included) that can help give a guidance as to the value of your company using a variety of method including multiples of profit and EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) using data from the market place.

The sector can affect your value greatly eg professional services can be 1xturnover, engineering 3-4xprofits, hi tech cutting edge companies 20xprofits.

My advice would be to seek some professional advice if you really want to know the value of your business

Answer 3

Assuming your profits are consistent and will remain that way with good management, businesses can be valued at 2.5-3 times annual profit.

Answer 4

The normal calculation is multiples of profit, this can vary from industry sector to sector however the norm is 1-1.5 times excluding assets, goodwill and company liabilities.

Answer 5

No idea...but a 2.5 million dollar profit on 3 million dollars total sales is one hell of a profit margin. What are you selling, p*ssy or cocaine?

Answer 6

3 X ANNUAL PROFIT