Usually you can determine this by multiplying the EBITDA (Earnings Before Interest Taxes, Depreciation and Amortization) by a multiple for your industry.
Typically, for most businesses of this kind, that multiple is 2 times the EBITDA, dependent on how much time the new owner will need to spend in the business.
If it is a turn key-type operation, that multiple may be 5 times to 10 times the EBITDA, depending on how the new owner can leverage current operations.
Regardless, a good CPA can help you with the valuation, as well as a business broker should you decide to go in that direction.
Brad Sugars is the founder of ActionCOACH, the world's number one business coaching firm. As a world-renowned entrepreneur, author and Business Coach, he has helped more than a million clients around the world find business and personal success.
Sugars has owned and operated more than two dozen companies including his main company, ActionCOACH, which has nearly 1,000 offices in 26 countries.
