A client is in the process of incorporating his sole trade and whilst any goodwill is personal to him and therefore not able to be 'sold' to his company there is a website which generates a small percentage of his total turnover.
This is self generated and I believe can be sold to the company - of course there is the thorny issue in that it needs a value attaching!
Currently, I have isolated the sales in the last 12 months and multiplied this by the gross profit percentage of all sales in the same period. I have then deducted the expenses incurred specifically in regard to the running/maintenance of the website such as google seo and a monthly fee paid for the software, to arrive at the 'net profit'.
Having researched it would seem that the value can be calculated as the net profits arising from the website multiplied by 1 to 3. My thoughts would be to use 1.5 times.
Does anyone have anything to add / any comments would be appreciated.
Thanking you all in anticipation.