Income Approach

2.5 min read. According to the Canadian Federation of Independent Business (CFIB), nearly three quarters (72%) of small business owners intend to exit their business in the next 10 years. Considering that, it’s essential to know how to calculate the value of your business before beginning negotiation. In valuing an operating business, it is common to use the income approach as the primary approach while using another approach (such as asset approach or market approach) as a sense check to ensure the value arrived at is accurate and defensible. Under the market approach, the comparable transaction analysis is commonly used. […]