What Methodology Does BizEquity Use?

BizEquity uses a propriety but real world oriented valuation approach. We include methods from the following valuation approaches utilized by professional business appraisers today:

Market Approach: This involves analyzing the recent sales of comparable businesses. In a way, this is similar to how residential real estate is valued, i.e., the firm is valued by way of market comps.

Income Approach: The income approach methods seek to transform measures of profits or cash into estimates of value by way of multiples, capitalization rates, and discount rates.

Rules-of-Thumb: These are simple but often powerful valuation methods that are utilized by market participants on a regular basis. Some business types are bought and sold almost exclusively by way of these “industry specific” rules of thumb.