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

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Question
Hi Brad,

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?

Answer
Hi
the business is worth some multiple of the Net Profit or EBITDA of the company.  I would need to dig deeper to give you a very accurate answer but in general you can count on a few times profit as a ballpark figure for a sales price.  I'm skeptical that you have $92k of profit on $140K of sales however.  That is the key.  Identifying the true profit potential of the business...  

Selling or Buying a Small Business

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Brad Poulos

Expertise

I can answer any questions regarding the legal, financial, operational and other issues regarding the sale or purchase of a small or medium sized business. I do not have any knowledge of Franchise purchases and can't answer questions on that.

Experience

I have bought and sold several businesses of my own, and assisted clients with the sale of several businesses.

Publications
Canadian Business Wireless Telecom

Education/Credentials
Associate Engineer - DeVry 1983 MBA - Ivey 1996

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