Whether you are ready to cash out now or you're just starting a business and want to set an end game target, we can help guide you in creating an option that fits you goals.
A business valuation is a complex process, but one of the simplest ways to value a business is a multiple of the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). You basically take your revenue and subtract your costs of goods sold and your operational expenses. You business could be worth up to 20 times the EBITDA, but the national average multiple is 4.4 times. So a business with a $500K EBITDA is worth about $2.2M.
You can take $2.2M and put it in an account that pays an interest rate of at least 4% per year and you will have a secure $88,000 per year for as long as you live. Another option is to invest it in real estate and create rental income. You can also create a hybrid strategy where you secure a certain income and invest the rest.