The document discusses the rule of thumb valuation method for small businesses. It is a quick valuation method that uses industry-based multiples of gross or net sales, or other financial indicators, to estimate a business's market value. While fast, it is not very accurate as it does not consider profits and can oversimplify valuations. The document provides examples of typical rule of thumb multiples used for different types of businesses and contact information for a business brokerage that can provide more details on formal business valuations.

1. RULE OF
THUMB
VALUATION
METHOD
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2. Rule of Thumb Method
So what is a Rule of
Thumb valuation?
Experience
Market Value
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4. Used by small business
Gross
Sales
or Net
Sales
Based on
or Other
Indicator
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6. Advantages of Rule of Thumb
Quick
Industry Based
Defensible
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8. Problems of Rule of Thumb
Not Accurate
Not Profit Based
Quick and Nasty
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10. Examples of Rule of Thumb
2.2 x topline income Insurance Brokerage
80c to $1 topline income Accountancy Practice
$3 to $3.50 topline income Real Estate Rent Roll
30 x weekly t/o plus F&F Newsagency
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12. For More Information On Your
Business Valuation
BCI Business Brokers
Tony Arena (Managing Director)
3/1 Alexander Street, Crows Nest, NSW, 2065
Phone: +61 2 9439 3399
Mobile: +61 411888148
Email: tarena@bc.com.au
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14. To Maximise Your
Business Value Visit
www.bc.com.au/maximise.html
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16. To Know More About
Valuing A Business
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