How Much Is My Business Worth?

One of the most common questions I hear from business owners is, “So what do you think my business is worth?”

And if you’ve ever asked that, you already know the frustrating answer: “It depends.”

Which really just means: most people are terrible at explaining valuation in a way that feels real and useful.

So, let’s have a real conversation, the kind I have across kitchen tables and in quiet office conference rooms when someone suddenly gets brave enough to ask.

There’s the number you hope for.
There’s the number someone once told you.
There’s the number you heard someone else got.
And then, eventually, there’s the number the market is willing to pay.

My job is to help you get as close to that last one as possible, and ideally, exceed it.

But before that can happen, it helps to understand what buyers actually look for and how they think about value. Because once you see it from their perspective, the whole process becomes much clearer, and a lot less mysterious.

There isn’t “one number” there are three

Most owners don’t realize they actually have three different values floating around in their mind:

1. The number they need

2. The number they want

3. The number the business is worth today
   

Sometimes all three match but usually, they don’t.

And there’s nothing wrong with that; it just means we need to get clarity early on so we can make a smart plan.

Think of it this way:

• The number you need is personal.

• The number you want is emotional.

• The number the business commands is market reality.

When those three align, sellers feel confident. When they don’t, sellers feel stuck.

Our job together is to bring them into alignment, either by adjusting expectations or increasing value before going to market.

Buyers don’t pay for the past, they pay for the future

This is the part no one tells owners:

Buyers aren’t really buying your history. They’re buying your future.

Yes, your past performance matters, but only because it helps predict what happens after they take over.

What buyers want to see is simple:

“If I step into this business tomorrow, how confident am I that it will continue to perform, or grow?”

That’s it. That one question drives most valuation decisions.

They don’t want to buy a job. They want to buy cash flow, systems, people, and momentum.

Here’s what really influences value

Every buyer, whether it’s an individual, a private equity group, or a strategic buyer, looks at similar things, just with different lenses.

Let’s talk about the ones that matter most.

1. Earnings quality (not just revenue)

People pay for profit, not size.

I meet owners who proudly tell me,

“We did $4 million last year.”

And that's impressive, but if margins are tight, that number doesn't tell the whole story.

Buyers look at your true cash flow, and they have ways of uncovering it. They aren’t fooled by accounting smoke and mirrors, and they’re not impressed by revenue without profits.

2. How dependent the business is on you

If everything runs through you - decisions, relationships, approvals, knowledge - buyers don’t see a business. They see a person with helpers.

That’s not criticism. Many owners built companies by being the glue.

But here's the truth:

The day your business can run without you is usually the day it becomes most valuable.

3. The quality of your financials

This one is big. Buyers love clarity. They fear confusion. If your books are clean, organized, and professionally presented, buyers relax.

If they look like a “family recipe” with a little of this, a little of that, some hand-written notes, and a few questionable line items then buyers assume risk, and risk reduces value.

4. People and processes

Do you have good people? Clear roles? Documented processes? A team that can carry the business forward?

Buyers pay premiums for stability and structure.

If your team is talented, loyal, and trained, that matters as much as your financials.

5. Customer diversification

One customer making up 60–70% of revenue?

That’s not a business; it’s a contract with a payroll attached to it. A healthy spread of customers gives buyers confidence.

But let's talk about something owners rarely share out loud

When someone says, “I think my business is worth $X,” there's usually a story behind that number.

Sometimes it's what you believe it should be worth, based on the years of effort and sacrifice.

Sometimes it’s based on what a friend’s company sold for, even if that business was in a different industry, different size, different market, and with different growth prospects.

And sometimes, if we're being honest, the number comes from pride, because it feels like a measure of success.

I understand all of that. Every bit of it. And I respect it deeply.

But buyers don’t pay based on emotion. They pay based on return, risk, and reward.

Your story matters to the legacy of your business. Numbers matter to the buyer.

My role is to honor the story and maximize the number.

Okay, so how do we actually determine value?

Here’s how I explain it in plain English:

Most small to mid-size companies are valued based on a multiple of earnings, usually something called SDE (seller’s discretionary earnings) or EBITDA.

Don't worry about the jargon. Here's the simple idea:

The better and more reliable the cash flow, the higher the multiple.

Clean books + solid systems + good team + owner not essential = higher multiple.

Messy books + everything in your head + key employee risk + customer concentration = lower multiple.

It's not judgment, it’s math, experience, and risk control.

“Can’t I just raise the price and see what happens?”

You can, technically. But it almost always backfires.

Pricing too high:

• Delays the sale

• Reduces buyer interest

• Sends a signal that you’re unrealistic

• Weakens negotiation leverage later

And the worst part? You often end up selling for less than if you started with the right price.

Serious buyers don’t chase overpriced businesses. They move on.

The best valuations aren’t predictions, they’re strategies

When we evaluate your business, we aren’t just identifying what it’s worth today, we’re identifying what it could be worth with the right preparation.

Sometimes that means:

• Cleaning up financials

• Delegating more

• Securing key employees

• Documenting processes

• Diversifying customers

• Finishing a growth project already underway

Many owners are only 6–18 months of focused effort away from a meaningfully higher sale price.

I don’t just tell you the number - I help you grow into the number.

A simple piece of advice

If you're curious about value, don't wait until you're 100% ready to sell to ask the question.

Understanding your value early gives you power. Power to plan, prepare, prioritize, and negotiate with confidence when the moment comes.

There’s nothing worse than hearing:

“I would have made changes if I had known.”

Know early. Decide thoughtfully. Move when you're ready.

If you’re wondering about your number…

That’s the first sign you should explore it.

Not commit to selling. Not list your business tomorrow. Just get clarity.

Clarity never hurts you.
Lack of clarity almost always does.

If you'd like to talk through what your business may be worth, and what could increase that value, I’m here for that conversation.

Confidential. No pressure. Just information you deserve to have.

Your business is likely your biggest financial asset. You should know where you stand.

And I’m happy to help you get there.