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New Member
posted Dec 5, 2019 9:33:18 AM

value of your business

If you are self-employed, but have no employees other than yourself and no actual inventory, how do you figure  the value of your business?

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2 Replies
Level 15
Dec 5, 2019 9:40:13 AM

Value for what or who?  Like a lender?  It might depend on what you need it for.

 

On your tax return you enter your income and expenses into schedule C.  The Net Profit or Loss is your personal income.  You can subtract a loss from your other income.  You pay self employment tax on a Net Profit of $400 or more in addition to any regular income tax on it.

 

Are you newly self employed?  Do you need more info on how to report it?

Level 13
Dec 5, 2019 4:09:11 PM

Valuing a business is not a perfect science.  There are a number of factors that go into a true valuation of a business.  And at the end of the day, for most small businesses the deciding factor is what a willing buyer will pay for the business.

 

The buyer will want to look at the earnings history and apply a multiple to the earnings.  The multiple will depend on the industry.  

 

The above is just a real simplified discussion of a complex area.