How do you place a value on a small company for sale?

I'm probably selling a company I set up about 4 years ago. I want a fair but not unreasonable price for it. How should I value the business. It has an established client base, with 90% of the business being repeat business from about 10 clients. The company has a reasonably good reputation, three or four key and committed staff and being a service industry has few hard assetts (none really worth costing). The company turns over about $350,000 a year and is growing. Our receivables are usually paid within 15 days. We do have a few techniques and some software which we've developed ourselves, which a buyer might benefit from. We're in frieght and use a lot of subcontractors.How do you place a value on a small company for sale?
There are a number of techniques that estimate the value of a company. From the article ';Determining the Price of a Small Business'; http://www.powerhomebiz.com/vol41/price.鈥?/a> here are some of the techniques:





1. Multiplier or market valuation. This method calculates the value of a business by using an ';industry average'; sales figure as a multiplier.





2. Asset Valuation. Some businesses are worth no more than the value of their tangible assets. If a company is asset-intensive, such as retail businesses and manufacturing companies, you can use the asset valuation method.





3. Capitalized Earnings. This method of valuation is suitable for service companies and other non-asset intensive businesses. This method places no value on fixed assets such as equipment, and takes into account a greater number of intangibles.





4. Intangible Value. Some businesses, particularly those that are not asset-intensive, may be harder to quantify.





5. Owner benefit valuation. This formula focuses on the seller's discretionary cash flow and is used most often for valuing businesses whose value comes from their ability to generate cash flow and profit.





6. Return on Investment. The most common form of determining the value of a business is through its return on investment, or the amount of money the buyer will realize compared to the performance of the business.





I suggest you consult a business valuation expert to help you determine the fair price of your business. Read the article ';How To Find The Right Professional To Value Your Business'; http://www.powerhomebiz.com/072005/valua鈥?/a> to get tips on how to select the best professional to help you.

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