Im not looking for a set in stone, absolute exact price for my business, but Id like to know if there is a rough guide line that people will start with as a ball park figure.I have heard one person say to multiply the companies most recent annual profit by four, and then youve got a ball park, but I have no idea if that is even remotely accurate. Answer1:Thats a tough question. First, the multiply by four approach. This is based on a valuation theory in business that uses the net present value of future earnings. Often times a period of five years would be used and you would project out five years of future earnings and discount each year based on an assumption of the "time value of money" (a dollar today is worth more than a dollar tomorrow). This gives you the current value of the business. Multiplying by four might be a good way to estimate five "discounted" years and an easier rule of thumb.There are some limitations to the future earnings method though. One thing to consider is whether or not the business can be realistically expected to last another five years and earn the same amount of money. A lot of things can happen in five years. What external factors affect the demand for your product or service? What about other competition?The other major thing to consider is what assets are you selling with the business and what is the value of those assets net of any loans that will be transfered along with the business. The future earnings method is best when you have very few actual physical assets that are being sold along with the business or if the net value of those assets is small because you still owe a lot in loans. It may not be a good choice if you have a lot of assets. Answer2:Start with Net Worth - the value of all the companys assets, less its liabilities and depreciation.Then add the profit factor. How many years profit to add depends on how "transferable" the profit is. For example, if much of the business depends on a key person and that key person will not be staying with the new owner, I would only add 1 years profit. But if the key person is staying, then 4 years is appropriate.