When it comes to exiting a small business, every owner wants to know what their business is worth. So how is the value calcuated? For most small businesses, it is based on what is called Seller's Discretionary Earnings. This method calculates the cash a new owner can generate from the business. To get a basic valuation, a business owner will provide basic information including revenue and profit for three years, total amount of assets and total liabilities and some additional information.
This infographic is designedby ExitGuide which helps small business owners create an exit strategy & manage the sale of their business.
