The company in the article appears to be more of a software company & less of a service company. From the conversations I've had, I would expect to see a valuation in the range of 2-5x the company's earnings.
(The term of art is SDE/Seller's Discretionary Earnings, and is basically the sum of all the money the owners are able to take out of the business, including paychecks and bonuses.)
Comments
The company in the article appears to be more of a software company & less of a service company. From the conversations I've had, I would expect to see a valuation in the range of 2-5x the company's earnings.
(The term of art is SDE/Seller's Discretionary Earnings, and is basically the sum of all the money the owners are able to take out of the business, including paychecks and bonuses.)
FEI and other brokers write a bunch about valuing small businesses: https://feinternational.com/blog/how-do-you-value-an-online-...