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Selling or Buying a Small Business/How Much Can I Sell My Business For?


Hi Rhett,

I'm curious how much I could sell my business for. I've never done this before, so I'm not sure which information is required, but here are some details about my business:

- We're in Toronto, Ontario, Canada
- It's a personal fitness training business. We help clients lose weight, gain muscle, etc.
- We're currently doing about $140,000/year in personal training sales, and of that, about $92,000 is profit.
- We have a website that is pulling in about 6-8 leads per month
- There are systems and operations, so if someone was to take over the business, they could hit the ground running.

I don't know if this is enough information, but based on what I have, what do you think my business could sell for?

Hi Igor

Thanks for your question.

Sounds like you have a good business going there. The profit margin seems really high - over half of your gross revenue is profit? Not sure how you are calculating profit, but for any business anywhere, if you are generating that much over and above your direct and indirect costs of business you are doing extremely well.

I assume you are taking into account salaries when you calculate profit. The salaries of owners (and of course payroll) should be a line item on the expense side. This is important because in most business sales, the value of the business is based primarily on the income, and typically one owner salary is considered a cost and the rest (perhaps other owners, family, etc) are taken out and "added back" into the total profit.

We always figure the value of the business based on the "adjusted net" income. This figure is:

- the total net profit, figured by taking gross revenue and subtracting all expenses, both direct and indirect, plus....
- the total "add backs" into the profit, meaning all benefits the owners get from the business that are not viewed as income, such as free gym membership to family members, free personal training, company car driven by owners, vitamin or enhancement supply for the owners the company pays for, etc.

I would leave one industry standard owner/manager salary in the mix, and take out any others and add them back into your profit. Then multiply that figure by 2.5, and that is an approximate value range your business should sell for.

If those numbers are accurate, you likely have a very valuable business that would sell easily.

Hope that helps,


Selling or Buying a Small Business

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Rhett Kniep, CBB


I advise others on how to value a business, how to sell a business, and how to buy a business, and give guidance on critical issues such as negotiation and growth strategies. I have knowledge and experience in real estate investing, including company entity structures and raising investment funds.


I have been a licensed agent and broker for over 12 years, selling commercial real estate, residential real estate, and businesses. I am a licensed building contractor of more than 20 years, and have both designed and built commercial and business structures, in addition to selling them.

California Association of Business Brokers, Contractor's State License Board, CA Association of Realtors, Better Business Bureau

The Contractor Investor, published by Phi Logos Publishing 2011, by Rhett Kniep (book on real estate investing for building contractors) Ezine Articles Diamond Author Blog

Certified Business Broker, California Association of Business Brokers, AA communications and am a student at Lincoln Law School in Sacramento. I have done numerous trainings over the years in real estate investing, real estate sales, and marketing.

Awards and Honors
Stormy Sebring College scholarship, Service Award Good New Rescue Mission, Film School certificate

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