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CONTACT US:
505.216.5155 office
866.440.2798 toll free
866.466.4019 fax
info@capadvs.com
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What is the value of my business?
The reality is that most buyers of small businesses are buying a stream of income. The income stream is used to provide a living for themselves and their family. Therefore, small businesses are typically valued using a multiple of the current owners discretionary cash flow. Discretionary cash flow is simply the cash that spins off from the business that is available for the owner to spend as he or she sees fit. In addition to cash flow, the company assets will also be used in determining the value of the company. Finally, overall revenue will be used as a final measure in determining value. The above analysis will yield a theoretical value. It is important to check to be sure the theoretical value is realistic when setting the sales price.
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