Andrew and Jessica have talked on previous episodes about valuation; one of the methodologies is the market method which compares past sales, multiples of earnings and percentage of sales to the sales price. It is one of the most reliable approaches for valuation and what eventually comes out of these data points are rules of thumb. These rules of thumb are backed up by statistical analysis of deals and closes in specific industries; the natural variations between one market and another are reflected in the rules of thumb, which are used to estimate a business value and industries benchmarks, like costs of sales, percentage of rent, materials cost, labor cost and even pick up anomalies. Listen to the experts talking about rules of thumb, who also bring some interesting cases in specific industries.
Click here to listen to The Deal Board Podcast on business valuation rules of thumbs.
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