This formula is usually $1 million per founder plus $1 million per patent plus $1 per active user. For example, tech-based companies tend to use a formula that accounts for the number of founders, patents, and active users. That can change based on your industry, though. So, if you’re making $1 million a year, your valuation then becomes $3 million. One of the best options, though, is to use the standard valuation formula of three times your gross revenue. Most business owners use a number of different options to value their companies. No matter what your ‘ why’ is, knowing the value of your company is key.
Overestimating the value of your company or undervaluing it is incredibly dangerous. How much is a business worth with 1 million in revenue? Calculating Value Business valuation with more than a million in revenue is absolutely key because it’s a tipping point for many potential buyers and investors alike. When a business reaches a certain revenue number, though, valuation becomes much more important. Understanding business value is key when you’re searching for investors, working to acquire more capital, or preparing your business for sale.
