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Selling an MLM IBO business

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Selling an MLM IBO business

Postby Greg Burns on Tue May 08, 2012 10:00 am

I have a significant position in my MLM company and I'm looking to sell my business. Though I have not grown the business, it is hybrid-binary plan with significant volume in my power leg. How would I evaluate how much this position is worth?
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Greg Burns
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Re: Selling an MLM IBO business

Postby Richard Bravo on Tue May 08, 2012 10:27 am

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Greg there are several equations and factors that come into play depending on the unique scenario.My advice would be to consult a professional business evaluator before making any final decisions.
With that said here is one very simplified example...


(Gross Annual Revenue) - (Expenses) = Value
Typically a multipliers of between 1-6 is applied, which is determined by industry standards

So lets say for example the formula looks like this:
gross annual revenue($130,000) - expenses($26,400) = $103,600 x 3 = $310,800

There are other variables that need to be considered such as capital, intellectual property, and most of all you. What is the role you play in maintaining the organization? If you are removed from the picture how long with the organization last? If it is self sustaining at this point and mostly passive for you, then that would affect the net valuation to a large extent.

As I said that is a down and dirty simplified example and you should consult a professional that is versed in mlm valuations.


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