1 - Asset Method - The asset value method is used to determine a minimum value range for a business. That value represents the estimated worth of all tangible and intangible assets. Asset value must not be determined solely on the basis of book value or an asset's worth in its current application, but rather replacement value including all installation and testing costs.

2 - Basic Method - This method is based on two pricing formulas. The first formula is a "rule of thumb" multiplier; one year's net cash flow plus assets at current market value. The second formula begins with the current market value of assets and to this adds a multiple of the monthly discretionary income based on the number of months required to start a similar business and bring it to a break even cash flow position.

3 - Capitalization Method - This method is based on a simple mathematical model which calculates a total investment based on discretionary cash flow divided by a rate of return associated with the level of risk.

4 - Critical Factor - This method takes into account the critical factors that will encourage or discourage a potential buyer prior to any in-depth investigation into the business. The critical factors comprising this method are:

• Percent of down payment
• Dollars of down payment
• Interest rate, Interest type and term of years
• Industry
• Desire - Quantifies the emotional motivation to buy
• Lease
• Utility - Alternate use of land and buildings for sale
• Accounts - Addresses AR and client base

5 - Debt Capacity - This method is purely a mathematical financial model. Direct business cash expenses are deducted from direct business cash revenues to determine discretionary cash flow. Deductions are then made for an operator's salary and the real depreciation cost of assets.

6 - Industry Method - This method is based on a series of weighted factors which resemble many of the functions previously used in the weighted and critical factors methods; however, in spite of oversimplification and the inability of the other functions to shift with changing economic conditions, these formulas have been included because they are routinely used as part of a curriculum for the potential buyers.

7 - National Method - The following are actual computed categories:

• Finance Years - The greater the loan period, the more the buyer will pay
• Financing Rate - Interest rate and type
• Years Operating - Each year of survival indicates future survival
• Consulting Time - Pays for education time from a seller
• Employees - This factor pays less for more employees
• Net Cash - The greater the discretionary cash the higher the price
• Local Economy
• Labor Market - Assumes labor is a major cost
• Union Strength
• Age of Industry
• National Economy
• Industry Market - Looks at the future markets for the products or services

8 - Weighted Factors - Emotionally motivated choices can be displayed mathematically through the use of hyperbolic and parabolic functions.
The following factors comprise the key factors:

• Labor
• Predictability
  
• Management
  
• Competition
  
• Revenues
  
• Longevity
  
• Loanability
  
• Clientele
  
• Liability

9 - Multiple Average - This method is the average of all of the previously described formulas based on a theory that a "reasonable" buyer will use more than one of the previous formulas.