The value (price, if we’re selling) of a business is what a willing buyer and seller agree it to be.  However, assuming both parties are informed and rational, the value of most small businesses is calculated by multiplying annual profit times a “multiple.” The multiple is a number that reflects buyer confidence and often falls between one and seven.  So, for example, a business with annual profit of $100,000 at a multiple of two would be worth $200,000.  

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