Is there an easy formula for valuing a tutoring business so one partner can buy out the other?
My wife started an in-home tutoring brokerage with another partner. They want to dissolve the relationship, but my wife will maintain the business. The company has gross revenues of about $150,000 a year, but I don't know whether that is the actual value of the company.
Numerous valuation methodologies can be used to determine the value of a business. The problem is that no one methodology is appropriate in all circumstances.
The approach to valuation and the amount you set can also have tax consequences. Best to speak to an accountant and/or business valuation specialist who is familiar with this area.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.