The majority of businesses are valued at less than $1M, here we explain valuing a small business…
The vast majority of businesses are worth less than $1M. Infact, 95% of all businesses are in this category, typically they employ fewer than 10 people and are affordable by most aspiring individual business owners.
The key to knowing how these businesses are valued lies in what those aspiring buyers see in the business. Usually they expect to work in the business and earn both the business profit and owner’s wages. We call this the buy a job market.
In another video we’ve suggested that the appropriate profit measure for these businesses is Net Profit before proprietors’ wages, which may be one or more working owners.
In this video we explain valuing a small business in this market.