Use a revenue multiple
Use an EBITDA multiple
Use a gross profit multiple
Use a discounted cash flow estimate
Compare to similar businesses sold recently
Apply an asset-based valuation
Adjust for debt and cash
Normalize owner compensation
Remove one-time expenses and revenues
Estimate sustainable earnings
Use industry-specific benchmarks
Consider growth rate and risk
Check customer concentration
Check recurring revenue percentage
Review working capital needs
Assess market conditions
Get a broker or appraiser opinion
Use the simplest method that fits the business