There are many components which factor in valuating a business – but the two basic components in business valuation are:

1) Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and
2) The Sales Multiple – a measurement of risk and how quick the buyer wants to recover the purchase price

“Staging” the business to maximize both components as well as accurate calculation, explanation, and knowledgeable negotiation in supporting the valuation are critical.

This article is contributed by Matthew Sullivan of Concept Business Brokers. For more information, please visit the site.