Cost Approach (AKA Many Hats Approach)
The Cost Approach breaks the duties of the business owner into its components such as company administration, accounting, finance, marketing, advertising, engineering, purchasing, etc.
The Cost Approach breaks down the time spent by the business owner into the various duties performed and quantifies the amount of time devoted to the different duties. Next, salary surveys are used to determine a comparable wage for each job duty performed by the business owner, then added up to arrive at the total "cost" to replace the services of the business owner.
The Cost Approach generally works best for small businesses where the business owner provides multiple services for the business (wears many hats).