Very niche specific discount rate

Hey guys,

I was hoping you guys can help me out with this problem. I really appreciate everyone's help.

I do valuations for businesses in a very specific/niche industry. Our clients are independent financial advisory firms that generate about $100K-$500K in annual revenues. These businesses are very small private companies where any type of comps are hard to get. Thus In most cases, the valuation model is based on 5 year DCF which is discounted by risk free + market premiums + industry specific subjective premiums.

However, I don't feel confident using just risk free + market premium and want to refresh the discount rate logic. But for firms this size, it's hard compare against any public firms to gather any debt/equity ratio, levered/unlevered beta, etc, etc. These type of firms are just running on quickbooks and balance statements are almost non existent. It's hard to substantiate the debt/equity applicable to the business.

So my question is, how do I calculate discount rate for companies of this size/nature?

Should I purchase equity reports and simply use the industry specific premiums? or Correlate against micro cap companies? Which methods are available for this type of valuation?

I appreciate your help. Thank you everyone.