Quote:
Originally Posted by businessforsale
To make $30K / year in the stock market, you'd have to invest about $250,000, so a $30K / year return would be worth $250K IF there wasn't any work involved. There is some work involved, though, even though the employee handles most of it. So let's cut that $250K figure in half. That leaves $125K as a rough first estimate of the value of the business.
Your thoughts?
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I think comparison to "the stock market" is too general. Find out what the multiple of earnings ratio is for sites like yours. $30,000 times "?"
In good economic times where there is a lot of growth potential, 10x earnings is not uncommon. In a mature market with a lot of stability you might see 3-5 times assuming the market is not flooded with similar sellers.
In a shit economy with a volatile product (which is probably where you are), 1 times earnings might be more realistic. But there are lots of factors.