This one has just hit me a little by surprise and I thought I should get a better idea on the basic of how this is done.

I've just been bringing the books for a signwriting client up to date, and he's just told me he's thinking of selling his business and wanted to know how it would be valued.

He is a soletrader but employs a junior to assist.  Working from home and with a van, he does have quite a bit of equipment along with some regular clients (I understand he's been trading for 11 years).

How is something like this usually valued?  Is it based on a combination of turnover, profit & assets?  He's only just mentioned it as a thought, hoping to get an idea of the figures but I wasn't sure so I told him I'd look into it a little to see about getting a rough idea.

Another thing he's prepared to do is contract himself back to the business for the first year.  Is this something kept separate and he'd be paid for, or is it often included as a part of the sale?

Any rough thoughts on how this sort of thing is usually done would be great!

Thanks

J