What is the value of my business?

There are a variety of methods used to value businesses, including EBITDA multiple, revenue multiple, and discounted cash flow.

When an investor is looking to buy part of your business, or you're ready to sell it outright, it's important to understand the value of the asset you've worked hard to create. 

There are three common ways to value a business:

  1. EBITDA multiple
  2. Revenue multiple
  3. Discounted Cash Flows

Once you identify a potential valuation, you can then divide amount of capital you need to raise by the total value. This will give you a proportional % that you might be willing to give in exchange for investment. 

The reality is that different parties will view the same asset as having a differing value. What's important is knowing your limits so you don't accidentally give up more than you'd like. 

Digital Exits provides a great overview of trends around the valuation methods used for ecommerce businesses.