How Much to Pay

There is no right or wrong amount - There is only what you are prepared to pay and what the seller is prepared to accept - nothing else is relevant. How much to pay is based on what CASH you can realistically expect to generate from the business in future years - (There are many valuation methods available from complicated mathematical formulas to a simple percentage of sales. These methods make a good cross-check to the method suggested below). HOW MUCH TO PAY - THE METHODOLOGY STEP 1: NORMALISED PROFIT Calculate a "normalised" annual cash profit (before tax) the business is likely to earn next year based on its past history. This is usually done by beginning with Last Year's annual profit and making adjustments for items discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping discountaushopping