How do I determine a price for buying out an equal partner?
We are not getting along very well and I want to buy my partner out. She asked if I was close in making an offer.
Join us at Entrepreneur magazine's Growth Conference, Dec. 15 in Long Beach, Calif. for a day of fresh ideas, business mentoring and networking. Register here for exclusive pricing, available only for a limited time.This is mostly a matter of negotiation. There are no firm guidelines. You can get some idea, if you're lucky (and are in a relatively common type of business) by looking at some of the links produced by a google search for "valuation guidelines". The idea is a lot like valuing houses, looking at comparable transactions, then adjusting for growth rates, location, history and other factors that matter. Usually the guidelines have to do with multiples of sales, profits, book value, resale value of assets or a few other formulas. Nothing is written in stone.
Unfortunately nobody's business is standard, so that gets hard. If you have a lawyer you both trust, he or she might be able to help. Mediation isn't uncommon.
Good luck with this,
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