# How do they calculate valuation on Shark Tank?

Get your free Shark Tank Valuation Spreadsheet now! To start, let's keep the math simple. If \$500,000 is the offer for 20%, then the total valuation is \$2,500,00. That's the cash paid divided by the percentage purchase, or \$500,000 / 20% = \$2,500.000.

Similarly, how a business is valued?

The other valuation approaches all think of a business as a stream of cash. They value a business by trying to come up with a value for that stream of cash. Revenue is the crudest approximation of a business's worth. For instance, a business might typically sell for "two times sales" or "one times sales."

How do you figure out the valuation of a company?

One way to place a valuation on the company is to calculate the total value of the assets you will be gaining by purchasing the company. Earnings are the company's revenue minus its costs; it is the amount that a company clears during a reporting period. Valuation is based on what this amount is worth to the buyer.

How do you sell a small business?

If you're considering selling your small business, consider these seven steps to stay on the offensive.

1. Determine the value of your company.