Annual Sales times industry multiple and annual profits times industry multiple are the two most common valuation formulas used by both buyers and sellers to estimate of the value of a business. Having valuations based on both formulas will give you an idea of the range of potential values for a small business.
To get industry multiples, we used historical data from business brokerage site BizBuySell.com. The day to day operation and future outlook of a business varies from industry to industry, so the calculator uses different multiples for different industries.