The BizBuySell Small Business Community

  • Get Expert Advice

  •  • Find Local Service Professionals

  •  • Share Your Experiences

What formula is now being used when considering a asking price ?

I have heard add the past 5 years of income and obtain an average for that total. Or now is it a 3 year total average?

No User Photo

Answer This Question

max 5000 characters

Web Reference (optional)

e.g., ""

Review Community Guidelines

Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

Submit Your Answer
Answers (4)
No User Photo

We are financial consultants to a group of investors whom we have their consent to manage their funds which is in our custody for cooperation in joint venture business investments.

Our areas of interest include Property Development and real estate, Health Care, Education and training, Mining and exploration, Energy, oil and gas,Technology, Software development, Agriculture, Manufacturing, Finance Services and Leisure.However, all viable proposals within reason will be considered.

Funds shall be made available to you as a direct investment loan at 3% interest rate per annual for a period of 2 or 30 years depending on what you prefer. You may contact us if you have interesting investment proposal for possible business collaboration for our study.

We look forward to your reply to enable us provide you with details or you may visit our website.

Kindly acknowledge receipt of email.

Thank you.

Yours Sincerely
Jesse Peterson
phone: (980) 239-7539

Aug 17, 2017
No User Photo
Homescape LLC
Cook County, IL


Some people look at the previous year(s) earning in deciding how much to pay for a business. Other(s) look at what the business could possibly make. The previous responders are correct, there is no one way to evaluate a business, it is really worth what you are willing to pay for it or receive for it. One professional said, "A business is worth what someone is willing to pay for it."


N. Coriano

Apr 3, 2011
Marv White
Hartford County, CT
Premium Broker

Hi Teresa, Julie is right, there is no formula. There are industry specific rules of thumb that may be helpful for an order of magnitude approximation. You will need get a professional business valuation done if you really want to know the value of the business.

Apr 3, 2011
No User Photo

Hello Teresa,

Anyone who tells you that their is a 'formula' for determining an asking price for a business is either a liar or a fool. There are simply too many variables involved. For more detailed advice about how to evaluate a business, please visit my blog: - feel free to post any questions you might have - I promise to answer them ASAP.

Good Luck
Julie A. Barnes, CPA

Apr 1, 2011

Start a Discussion