What does the selling price of a business account for?
When someone buys an existing business, say its a small business. What would the selling price account for?
My assumption would be the land and building value, in addition to 1 to 5 years of the businesses average yearly income.
- knowitallLv 71 decade agoFavorite Answer
And what if the business does not own the land and building and are just renting? Usually you buy the assets ( equipment, supplies, inventory) and 2 to 2.5 times annual profit. You are paying also for goodwill, and make sure to see that you can take over the lease and not have to move immediately.
- dongesLv 44 years ago
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