Placing a value on a school

I have been asked several times about buying language schools and I have never really given a good answer…I just don’t know how to figure out the value of a school (ie business). People have offered to sell me their schools before and I have turned them down just because it didn’t “feel right”. But now that I want to sell my interests I would like to hear some comments about how to come up with a selling price for a business. Any ideas?

There was something of a discussion on this earlier in the forums. A question I raised (KenTaiwan98). If you search, you should find it.

I would guess three variants:

  1. assets only least favorable for you, since many of the ‘assets’ are relationships and impossible to monetize.
  2. total invested plus a reasonable rate of return on that amount.
    Won’t include intangibles either.
  3. a multiple of one year’s profit. Any ideas what a suitable multiple would be?


Thanks Kenneth,

Yeah, I was thinking of some sort of multiple of a year’s profit. I know how much the schools make per year but I don’t know either what would be a fair multiple…I guess that’s why I posted something here.

well, how much would you pay to buy your business, if say I was selling it?

Then how much do you think it’s REALLY worth?
Then below what price would you feel uncomfortable selling it at?