What Is My Business Really Worth?
What’s it worth?
It’s one of the first questions most business owners ask. Sometimes out loud. Often quietly.
And fair enough. Your business is likely your most valuable asset — not just financially, but emotionally. You’ve put years into building it. Navigated downturns. Built relationships. Carried risk. Made payroll. Missed holidays.
So it’s natural to want a clear, satisfying answer. But valuation isn’t simple math. It’s part earnings, part market, and part buyer perspective.
Here’s how we help owners think about it with clarity.
Why Valuation Feels Fuzzy
Most business owners have a number in mind. Sometimes, it’s based on a buddy’s sale, sometimes on a multiple they read online, or sometimes on a feeling.
But there’s often a gap between that number and what the market might actually bear. And that gap isn’t always because the business is underperforming.
It’s because:
Emotion plays a role: “This is my life’s work.”
Comps are misleading: “A guy I know got 7x for something similar.”
Risk looks different to a buyer: “Can this business thrive without the owner?”
Let’s pause on comps for a second. They come up in almost every conversation, and for good reason: they’re one of the only data points a business owner might hear about. But they’re often incomplete or misunderstood.
The overwhelming majority of private business sales aren’t public. There is no detailed press release, database, or verifiable disclosure.
Even when owners do talk about their sale price, what’s rarely shared is what it took to get that number:
Did they take 70% up front and 30% in an earnout?
Was there vendor financing involved?
Did the buyer assume any debt?
Did they roll equity into the new entity?
Was that multiple on trailing twelve months, or normalized EBITDA?
Two businesses may have sold for the exact “headline multiple,” but the structure of those deals may have been radically different. That’s why comparing against someone else’s outcome without knowing the details can create more confusion than clarity.
What Actually Drives Value
Buyers don’t just look at the bottom line. They look at how durable, transferable, and scalable your business is. Some of the most significant factors are:
Earnings Quality
Not all earnings are equal. Buyers look for clean, consistent, well-documented profit streams. Recurring revenue models are typically valued more highly than one-time or project-based revenue. Margin profile, cost stability, and year-over-year growth trends also play a big role.
Client Concentration
Many small and family-owned businesses are built on the strength of a handful of major clients (or even just one). While that’s often a function of long-standing relationships, it poses a real risk to buyers. One client leaving shouldn’t break the business. If your revenue base isn’t diversified, expect scrutiny.
Owner Dependence
In many businesses, the owner is the brand. The clients trust you personally, the staff lean on your judgment, and the market sees you as the face of the firm. Unfortunately, the perceived value drops fast if a buyer can’t see the business performing without you at the helm.
Which is why one of the most common pieces of advice we give to owners thinking about selling is this:
Hire a GM, or a senior VP of sales , or an outside President. Prove that the business isn’t overly reliant on you to generate revenue.
It’s not about giving up control prematurely. It’s about creating proof that the business is operationally sound and culturally stable when you’re not the one steering the ship. That single move often does more to increase perceived value than any one-off financial tweak.
Market Position
Is your business in a growing sector? Do you have a clear niche or defensible advantage? Buyers want to know that you’re not just surviving — you’re positioned to lead, differentiate, and maintain pricing power. A crowded or commoditized market makes this harder.
Growth Potential
Buyers often pay not just for what you’ve built, but for what they believe they can grow from it. That could be geographic expansion, new verticals, cross-selling, or operational efficiencies. The more visible and realistic those levers are, the more compelling the opportunity becomes.
Valuation isn’t just about how the business is performing today.
It’s about how a buyer sees the next five years — and whether they believe those years look as strong without you in the room.
Why We Talk in Ranges
No one can give you a precise value without understanding your business in context. That’s why we talk in ranges, not promises.
A business might be worth 4x earnings to one buyer, and 6x to another, depending on:
Strategic fit
Deal structure
Risk tolerance
Financing approach
We’ve seen two offers on the same business vary by millions. The value isn’t fixed. It’s shaped by timing, positioning, and buyer strategy.
The “I’ll Just Keep Earning” Fallacy
One of the most common reactions to a lower-than-expected valuation is:
“If I can’t get the premium multiple I want, I’ll just work another X years and make the same money anyway.”
It sounds logical, but it’s usually not. That assumption doesn’t account for:
Risk: Future earnings aren’t guaranteed
Market cycles: Valuations shift, buyer demand isn’t static, and global economics is fluid
Burnout: Many owners underestimate how hard it is to keep pushing once they’ve mentally started to detach, or how burnt out they were when we began considering a sale in the first place
Taxes and present value: Annual income, even dividends, is taxed differently from a capital gain. The value of money today is always higher than the same money tomorrow.
It’s the business equivalent of the hot hand fallacy: believing past success guarantees future results, simply because the pattern hasn’t yet been broken.
In reality, the next five years might look different from the last five. Choosing to keep going should be a strategic decision, not just an emotional hedge against an unexpected valuation.
You Don’t Need a Full Auction to Get Clarity
Most owners we work with aren’t ready to sell today. They’re thinking 12–24 months out. They want to understand where they stand, what drives their value, and what steps they can take now to improve it.
That’s a smart approach.
You don’t need to run a broad market process to get insight into value. In fact, running a full auction too early, before the business is ready, or before you’re personally ready, can do more harm than good. There are quieter, more strategic ways to assess the landscape:
A light-touch outreach to 2–3 strategic buyers
A confidential valuation review with an experienced advisor
An internal readiness audit to identify risk factors and potential deal bottlenecks
Each of these steps can help you understand how the market might perceive your business without committing to a sale. We help owners assess their value without pressure, just a confidential conversation grounded in experience.
Final Thought
You don’t need a perfect number to start planning. But you do need perspective.
If you’re wondering what your business might be worth, we’re happy to talk it through