Quote:
Originally Posted by BigFurry
Yea I don't know where he got the 10 years, it's totally wrong
|
Not really... Its business major 101
Similar to bond or real estate valuations, the value of a business can be expressed as the present value of expected future earnings over the years. Use any calculator to determine the value of your business today based on discounted future cash flows with consideration to "excess compensation" paid to owners, level of risk, and possible adjustments for small size or lack of marketability.
So if you can show that your business has a solid base then:
Quote:
|
Summary Table Summary Total future earnings/excess compensation $2,400,000 Calculated discount rate 10% Present value of today's earnings/excess compensation $1,622,166 Less adjustment for small size/lack of marketability $162,217 Estimated business value $1,459,949 - See more at: https://www.calcxml.com/calculators/...n?skn=#results
|
Now, I have applied the standard growth of the years expectations, but reduced it by 10% per annum for lack of marketability.... There are many calculators, but all will come with the same or similar results...
Of course there are many caveats...most of these formulas presume that the business has its own assets and longevity over the years. In our ( web owners) case that we own an exlusive content... So..if you just recycling other content, you are completely correct not worth a rats ass.
