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Ever wondered about how small businesses are valued? How-To Guide is free in exchange for your feedback...

One of my clients, Steven Schlagel, CPA, CVA, CFP, JD has just completed a guide that is helpful to entrepreneurs in learning how small businesses are valued. We are interested in gathering some useful feedback on the guide and would like to make it available - via email or download (http://dl.dropbox.com/u/32611374/The%20Price%20is%20Right%20-%20How%20to%20Value%20a%20Small%20Business.pdf) - to anyone who might be interested. In exchange for your free copy, we ask that you complete a brief four question survey at the end of the guide. If you have any further questions, please feel free to PM me.

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SavvyAssist Virtual Assistant Services
Founder & CEO
Hays County, TX

Chris T, you seem very knowledgable! I would love to get your feedback on the guide, as it takes what you've mentioned here as a rule of thumb and expands on it. Might you have time to read it and let me know what you think?

Jul 18, 2011
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Here is a general rule of thumb to use. Take 1/3 of the cash flow of the business and you should be able to reach the asking price in 5 years. I.E. a 100,000 dollar cash flow business can be listed for sale at 165,000 to be of a general fair market value. This is a general rule as one should remember not to forget you cash flow will vary depending on your profits versus costs. Just because a business is listed for 165,000 and says that you can make 100k in cash flow will be dependent on your success or failure, which could easily turn into a 0K profit business within a couple years if it is severely mis-managed.

Jul 17, 2011

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