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Valuation is not an exact science — it is a negotiation informed by data. Understanding the foundations helps you engage with buyers and investors with confidence.
There is no single correct way to value a business. The method chosen depends on the type of business, its stage, and the availability of financial data.
Earnings Before Interest, Tax, Depreciation, and Amortization — multiplied by a sector-specific factor. Common in established businesses with consistent revenue. The multiple varies by sector, geography, growth rate, and risk profile.
Used when EBITDA is negative or not yet stable. Common in early-stage digital businesses, SaaS products, and franchise brands. Revenue multiples are typically lower than EBITDA multiples and carry more risk for the buyer.
The tangible asset value of the business — property, equipment, inventory, and receivables — minus liabilities. Common for industrial, real estate, and asset-heavy businesses where the going concern value aligns closely with asset value.
Projects future cash flows and discounts them to a present value. Appropriate for businesses with predictable long-term cash flows. Highly sensitive to assumptions — both a strength and a weakness.
El Arab Club does not provide licensed valuation services or valuation opinions. The information on this page is for general educational purposes only. Sellers and buyers should engage independent, qualified business appraisers for transaction purposes.
Contact the club team for guidance on how to present your business to serious investors.