Vijay's reply is pretty accurate. There are many ways to value companies, but much fewer when it does less than 5mm in revenue a year. A multiple (2-3x) is applied to the Owner's Benefit value which is Net Income adding back Depreciation and Interest as well as all owner related expenses that will be eliminated under a new owner. There are minor variations on this approach, but this is a pretty generic start. There are discounts and premiums added for business specific details.
As with any purchase, the company is only worth someone is willing to pay for it. So finding a strategic buyer is your best bet followed by a financial buyer, and lastly all other types of buyers.
There are valuation tools out there (www.peakexits.com) and business listing sites (www.bizbuysell.com) that you will be able to source some comparable asking prices in your specific region.