What multiple of profit is fair when buying a small local business?

Sellers quote 3x–5x. What drives a fair multiple for shops and service firms in Pakistan?

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Zubair Hadir 2 months ago

Multiples track risk: recurring revenue, owner dependence, clean books, and transferability. Owner-operated shops with messy cash often deserve lower multiples than contracted B2B services.

Normalize seller discretionary earnings, then discount for key-person risk. Asset value is a floor, not the deal.

Related: business valuation multiple Pakistan, buy small business EBITDA multiple

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