Fit Small Business: Get Your Business Into Shape! › Forums › Small Business Finance Forum › How do you \"value\" a business when all you will be selling is client base and gc › Reply To: How do you \"value\" a business when all you will be selling is client base and gc
I would check around with industry experts to have a good idea of what a fair market value for your area is, because assets like books of business vary by state and geographic location as well as industry. At the very least it should be worth 1 year’s worth of revenues, but more likely in the range of 1.5-2x that number. This is assuming that your clients are consistent customers and that your industry doesn’t have a huge drop off when another company purchases these clients.
If there is a drop-off then that should be calculated for your negotiation and the purchase price will likely need to reflect the average percentage drop. You need to also make sure you’re getting enough money to take care of your other responsibilities (rent through your current lease, any outstanding debt, etc.). You don’t want to be hung with a loss after you’ve sold the most important assets to a successful business. Good luck!