Christopher Michael P.C. works with a network of professional valuation experts to ensure that clients are provided with accurate and independent third-party appraisals of business value.
Business valuations are an important part of the process of transferring a business to employee ownership––through either a gift or a sale. Typically, business value is some multiple of the net earnings of the business. A very general formula might involve averaging the prior three years' net earnings and multiplying that average by three. Note that in assessing prior annual earnings, your salary as an owner should be deducted from the total income (whether you took that salary as a wage or a profit distribution).