Business for sale

[sam1ellie]

Can anyone tell me how to value my hairdressing business? There are four years left to run on the lease. I've been advised to multiply the profit figure by 3, is this right? Any help or advise would be helpful, thanks.

[Didwot]

There is no simple answer. The value of the business, assuming it has nok assets of particular value, is related to the "Goodwill". That is to say the fact that your customers keep coming back to you. The value of Goodwill depemds on how likely your customers are to remain with the business, and how much profit you can make from them.
If you work long hours and earn little then the business is worth little or nothing. If you make a huge profit and hardly lift a finger then the business is valuable. The question is: How much more profit do yoiu make by running the business, than by doing the same job as an employee? It is this super profit that people will pay good money to get.