The most widely used method to value and determine an asking price for a small business is based on the adjustment or recasting of a business's most recent annual profit and loss statement. The goal in this process is to determine valuation of shop the true earning power of the business by adding back to the net profit all the non-essential or discretionary expenses not necessary to run the business to demonstrate a more realistic net cash flow for the owner.
There are a variety of resources available to the public to find and research valuation of shop multiples that may be relevant or specific to your business. This includes well known guides such as the Business Reference Guild by Tom West, and business for sale directories such as BizBuySell.com that provide a data base of recent shop business sales and the multiples achieved. You may also want to visit this link which provides a free online business valuation
