The method is earnings times a multiple, and the argument is always about which earnings figure and which multiple rather than about the arithmetic, which is why two quotes on the same business can differ by half without either being dishonest.
Which earnings figure
Below roughly a million dollars of value, buyers price on seller's discretionary earnings: net profit plus the owner's salary, plus one-off costs and genuine personal expenses run through the business. Above that they price on adjusted EBITDA, which does not add the owner's salary back because a replacement has to be paid. Moving from one to the other changes the number materially, so know which basis a quote is on.
Which multiple
It is set by risk, not by industry alone. Recurring revenue, contracts, a management team that is not you, and customers spread widely all push it up; owner dependence, one dominant client and unverifiable books push it down. Empire Flippers publishes its own version for online businesses as the last twelve months of net profit times a range that depends on several factors.
What this page will not do
Give you a number. This site is not an appraiser and states no view on what any particular business is worth. A broker's free valuation is a marketing estimate; a formal appraisal is a paid engagement with a report behind it, and the two are used for different things.
Questions people ask about how much can i sell my business for
What is a typical multiple for a small business?
Ranges are published widely and vary by trade, size and how the earnings figure was defined, which is why quoting one without seeing the accounts is misleading. Ask two brokers to show their working on your numbers.
Does the price include the property or the stock?
Only if the sale says so. Write down what is included before anyone quotes, because a price that includes inventory and one that does not are not comparable.
What are add-backs?
Costs in the accounts that a new owner would not incur, the owner's above-market salary, personal expenses, genuine one-offs, added back to arrive at the earnings a buyer is really buying. Undocumented ones do not survive diligence.