Business Value Calculator

ASSETS

$

GOODWILL (Super profit)

$

Your business could be worth

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Goodwill (Super profit)

As goodwill is so hard to value one method is to estimate what extra profit the business would generate each year, over and above what you expect as a return. For example if the business is making $200,000 net profit and you need $150,000 as a return, then it's generating $50,000 more than required. The assumption is this extra profit is from things that make up 'goodwill' (great location, qualified staff, exclusive products, locked in loyal customers, great systems etc). You can of course enter $0 if the business isn't performing as you'd like.

Years that will last

Decide how long this 'super profit' amount (or goodwill) will last from the previous owner. If you think after 1 year you've have changed the business significantly, then enter 1. If the business is outstanding and it would run itself, enter 2 to 5 which represents the number of years it will last.

Finally

This is a guide only. A business is worth what one person is prepared to offer, and the other person is prepared to accept. Seek advice when valuing your business with a professional that understands your industry.