I See a lot of people come to me and say
hey I've got a business is making $30,000 a year in profit
I've heard it's worth a 5 x multiple......but it's probably not. And this is just from 27 years of experience of understanding what the buyers needs.
If you think about a buyer who is trying to buy a business
that makes $30,000 a year, they don't have $150,000 laying around.
$30,000 a year is a side Uber hustle right.
They don't have a lot of money they are looking for extra income.
So Typically to get that 5x on your business you have to be doing 500k profit or more a year because of the sophistication and needs of buyers at the higher end of the buyer pool.