If the number’s too high to get a deal done, then it’s the wrong number, if it’s too low, it’s again, the wrong number. There’s a range between these extremes where a deal will get done, it’s just a question of where it’ll fall. Most of the time, it’s not to your best interest to try and maximize the number, on either end.

There are many ways to get to a number. But remember, it’s a worthless number unless it gets a deal done.

That having been said, what are some ways of finding that elusive number?

Multiple of revenues. 1x what your annual revenue is, 2x your annual revenue, depending on what your industry is like.

Book value: all the assets of your company.

1x gross margins. This is a pretty harsh way of valuing the company, but depends on the industry.

The truth is, the better your business is doing, the higher the valuation will be. If you have no revenues, if you have no IP, if all you have is a business plan and a smile, what do you think you’re really worth?