How do you value goodwill in a business?

I am going into partnership with another company, and we will be opening a new branch in my area (I will be managing the unit in my area).





They are planning to charge me a goodwill as they鈥檝e been in existence for 10 years and they want to be compensated for this new venture between us using their brand / experience / know how 鈥?how do I value the goodwill so that I know if it鈥檚 a fair value or not?How do you value goodwill in a business?
A business is simply worth the current value of its assets plus a multiple of its annual profit.





A multiple of the annual profit that it will make (without the current owners) is the goodwill.





If you want to make 25% per annum on your investment in the goodwill, then the goodwill is 4 years profit etc.