Multiple for business

Re: Multiple for business

It really depends on what industry you are looking at. In many industries people look at a multiple of EBITDA basically net income. For a high growth industry it could be 10-19 times EBITDA for a slow growth it could be only a few times.

Re: Multiple for business

You can also use a multiple of revenue. There real key is to use a couple of different measurements and other comps to make sure you are in the ball park.

Re: Multiple for business

If their are public firms in the same space look at what multiple they are trading at.

Re: Multiple for business

Most brokerage research reports on an industry will provide you with ideas on what the multiple should be.

Re: Multiple for business

Unfortunately or fortunately depending on how it works out, multiples do not mean that much outside of the public arena. Some small business owners will have a price and mind and will not move on it others will sell their business for less than it is worth. This process especially for private companies is more art than science.