info@ubssolution.com               Content copyright. Universal Business Structured Solution. All rights reserved. The income approach takes into consideration the company's level of earnings using a capitalization rate, discount rate or multiplier.  Several income approach methods are frequently used.  Each method requires a level of earnings and a conversion factor to translate the earnings into a company value.  Selecting the proper level of earnings - after-tax, pretax, and discretionary or cash flow - and matching it with the proper conversion factor - discount rate, cap rate or a multiplier - is critical to calculating a reasonable value. Market Approach The market approach sets a value based on the values of other businesses that have been sold.  Setting the market value involves researching the sale prices for similar businesses in a geographic area.  In some cases, however, finding a company that is similar in many ways to your company may be difficult. Whatever your goal, you want a good advisor to help you assess the value of your company.  A business owner should never accept a computer-generated valuation or a one-size-fits-all approach when selling the business.  And don't be impressed by the person who presents the highest value - you may only be setting yourself up for failure during the sale process. 888-778-1437 Facts about Buying or Selling a Business: Different types of buyers pay different prices. Only the right buyer pays the right price. No one pays more than they think a business is worth. Different types of businesses will command different prices. Buyers would rather start a business of their own than buy yours. Buyers really want "all the right things to be wrong". Sellers want 100% cash at closing. Buyers want 100% seller financing. It is difficult to find competent advice and counsel when buying or selling a business. Myths about Buying or Selling a Business: Buy/Sell Business Expert 888-778-1437 888-778-1437              UB Solution is a Private Capital Advisory Firm and Direct Lender specializing in out of the box Financing.