Author Topic: How to calculate Small Business value into one's net worth  (Read 10373 times)

paulbunyan

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How to calculate Small Business value into one's net worth
« on: November 26, 2018, 04:47:40 AM »
I've had a small business for just over 8 years now that in theory could be sold for a low 7 figure amount although I don't plan to sell anytime soon.  I'm running it with minimal debt(less than $10K) and have accumulated mid 6 figures in working capital, inventory & assets(non RE) which is required to operate at current numbers and continue to fund manageable growth.  Considering I don't plan to sell and selling a small business is no small task is it futile to even consider the potential sales value(industry multiple of SDE) of my business in my net worth? Should I just use the shareholder equity on my balance sheet if I want to plug in a number? 

Cheezus

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Re: How to calculate Small Business value into one's net worth
« Reply #1 on: November 26, 2018, 05:30:44 AM »
I don't calculate it in to my net worth.  Is there a reason you want to add it in so badly?  Seems if you have an idea of what it would sell for, then you know it's value and you already know how much it adds to your net worth.  If anything, I'd take what you think it's worth and cut 25% - 50% off that number.

Sam

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Re: How to calculate Small Business value into one's net worth
« Reply #2 on: February 06, 2019, 04:24:30 PM »
Just value it as a conservative multiple of revenue or profits based on comps.

It's worth adding it to your net worth. Keeps me motivated.
Regards,

Sam