How do I calculate the selling price of my business?
Ava Robinson
Published Apr 10, 2026
There are a number of ways to determine the market value of your business.
- Tally the value of assets. Add up the value of everything the business owns, including all equipment and inventory.
- Base it on revenue.
- Use earnings multiples.
- Do a discounted cash-flow analysis.
- Go beyond financial formulas.
How do you compute cost of sales?
The cost of sales is calculated as beginning inventory + purchases – ending inventory. The cost of sales does not include any general and administrative expenses.
How to Calculate Selling Price Per Unit
- Determine the total cost of all units purchased.
- Divide the total cost by the number of units purchased to get the cost price.
- Use the selling price formula to calculate the final price: Selling Price = Cost Price + Profit Margin.
What is the multiplier to value a business?
The multiplier for a small to midsized business will generally fall between 1 and 3‚ meaning‚ that you will multiply your earnings before interest and taxes (EBIT) by either 1X‚ 2X or 3X. For larger‚ more established organizations‚ the multiplier can be 4 or higher.
How to calculate the value of your business?
A Quick and Simple Way to Value Your Business Online. 1 Step 1: Determine the Cash Flow of the business. Discretionary Earnings are the Net Earnings of the business, before Interest, Taxes, Depreciation and 2 Step 2: Determine the Multiple of Earnings to Use. 3 Purpose Of Valuation (Informational only)
How much does it cost to sell a small business?
A business broker often charges an average of 10% for businesses under $1 million; while that may seem steep, the broker may also be able to negotiate a deal that is better for you than the one you would have arranged by yourself. 7. Handling the Profits Take some time—at least a few months—before spending the profits from the sale.
What’s the best way to sell a corporation?
If you own a corporation, there’s a choice in how to structure the sale: sell stock or characterize the transaction as a sale of assets. Generally, sellers like to simply sell the stock to limit tax reporting to capital gain on the transaction.
How to do a free business valuation calculator?
For a more personalized and in depth business valuation, we provide a free business evaluation and consultation for local business owners who are thinking about selling their business. See business valuation tool instructions for an explanation of the factors involved in the calculation.
