Exodus Business Solutions can help you determine a fair and accurate valuation for your business.
The best results are produced by an in-depth analysis of many factors. Exodus is very experienced at assembling an accurate picture and executive summary. However, from time to time we are asked: "Isn't there some kind of rule of thumb short formula for businesses?" The answer is that, yes there are short formulas, but these are generally inaccurate. Even though that is the case we are sharing with you what some people think are various rule of thumb valuation methods for specific types of businesses.
| Type
of Business |
Rule
of Thumb Valuation |
Accounting
Firms |
100%
- 125% of annual revenues |
Auto
Dealers |
2-3
years net income + tangible assets |
Book
Stores |
15%
of annual sales + inventory |
Coffee
Shops |
40%
- 45% of annual sales + inventory |
Courier
Services |
70%
of annual sales |
Day
Care Centers |
2-3
times annual cash flow |
Dental
Practices |
60%
- 70% of annual revenues |
Dry
Cleaners |
70%
- 100% of annual sales |
Employment
& Personnel Agencies |
50%
- 100% of annual revenues |
Engineering
practices |
40%
of annual revenues |
Florists |
34%
of annual sales + inventory |
Food/Gourmet
Shops |
20%
of annual sales + inventory |
Furniture
& Appliance Stores |
15%
- 25% of annual sales + inventory |
Gas
Stations |
15%
- 25% of annual sales + equip/inventory |
Gift
& Card Shops |
32%
- 40% of annual sales + inventory |
Grocery
Stores |
11%
- 18% of annual sales + inventory |
Insurance
Agencies |
100%
- 125% of annual commissions |
Janitorial
& Landscape Contractors |
40%
- 50% of annual sales |
Law
Practices |
40%
- 100% of annual fees |
Liquor
Stores |
25%
of annual sales + inventory |
Property
Management Companies |
50%
- 100% of annual revenues |
Restaurants
(non-franchised) |
30%
- 45% of annual sales |
Sporting
Goods Stores |
30%
of annual sales + inventory |
Taverns |
55%
of annual sales |
Travel
Agencies |
40%
- 60% of annual commissions |
Veterinary
Practices |
60%
- 125% of annual revenues |
