The customized Income-Based Valuation represents the past, present and future earnings of your business. It is a sophisticated valuation
technique which relies on past and present Net Profit times future earnings to calculate
the business’ value. Adjusted Cash Flow is calculated, wherein
expenses are removed that were not necessary to the successful operation of the business.
Such expenses might include new office equipment or perhaps some of the cell phones covered
in the telephone expenses, one time expenses like moving location.
Cash Flow (e.g. profit) is also adjusted to reflect expenses that the new owner will have that the selling owner does not
have, such as rent, if the business is being moved from the current owner’s house.
The Exit Eagle’s proprietary
Future Earnings Multiplier (FEM) is used to establish the “goodwill” of the business;
that is, to project the value of future earnings, which is the most important component to
the buyers. This multiplier reflects the unique strengths and qualities of your business,
as opposed to basing your sale price on the strengths and weaknesses of other people’s businesses.