The Rule of Thumb Appraisal Method is a method often used to compute the approximate value of closely held small businesses. This method relies on a multiple of some unit of measure. The unit of measure changes based on the type of business or industry. It may be the number of subscribers, gross annual commissions, or even gross annual sales.
The following table comes from BizStats.com, which is a reliable source for Rule of Thumb valuations.
Does the Rule of Thumb Appraisal Method apply to your business or to your acquisition target?
