Calculating the Value of a Business

Use the Discretionary Income Multiplier Method to determine the value of most small businesses. If the company has revenues of less than $5,0000,000 per year, this is a great tool to determine the value of the business operation.

Business and Industry Growth

Business and Industry Growth

The second most weighted factor in the risk multiplier series for the Discretionary Income Multiplier Formula is business and industry growth.  This factor evaluates the overall change in an industry and in particular the business under review over the most recent three years.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

Calculating the Value of a Business – Discretionary Income Multiplier Formula

Discretionary Income Multiplier Formula

In the world of small business, the sale of a business is dependent on two critical elements.  They are DISCRETIONARY INCOME and the BUSINESS RISK MULTIPLIER.  These two elements are multiplied to create the overall value of the business operation.  In general, no small business operation is worth more than three times the discretionary income.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register

The Cost of One Putt

Using a large database, I calculated the average cost of one putt for each professional golfer. In business, this is known as the marginal cost of doing business.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
Log In Register
Follow by Email
Facebook
Google+
https://businessecon.org/tag/calculating-the-value-of-a-business">
Twitter
LinkedIn