When and Why to Get Your Business Valued
One of the first questions I hear from business owners—whether they’re thinking of selling now or years from now—is: How much is my business worth? And it’s a good question. But it’s not one you can—or should—guess at. A realistic valuation takes more than a gut feeling. It requires a professional to have a clear look at your financials, the current market, your industry landscape, and how your business compares to similar companies.
The goal is to understand your fair market value—so you can make smart decisions, whether you’re preparing for a sale, succession planning, navigating a partnership, or simply looking ahead. Price your business too high, and you risk turning off serious buyers. Too low, and you might leave money on the table.
For businesses with revenue under $5 million, the process typically starts with a Broker’s Opinion of Value. We look at historical financials, the owner’s benefit, deal comps, and the specific dynamics of your industry and region. It’s a practical, market-based estimate that gives you a realistic sense of what buyers might be willing to pay.
For companies with revenue north of $10 million—especially those with consistent earnings and a strong operational foundation—a formal Quality of Earnings (QOE) report may be more appropriate. This is especially important when private equity or institutional buyers are involved. The key is working with an advisor who understands what type of valuation fits your stage, your business model, and your goals.
Getting a valuation isn’t just about assigning a number to your business today. It’s about positioning for tomorrow. A good valuation will show you where you stand in the current market—and what levers you can pull to improve that number.
One area that always matters to buyers—and should matter to you—is performance over time. Year-over-year growth signals strength and long-term value. It tells a buyer your business isn’t just coasting—it’s progressing. Buyers also look closely at quarter-by-quarter trends to assess momentum. Are you building consistently? Are there seasonal dips? Are there sudden drops or outliers that raise questions? Even if your annual numbers look solid, a weak quarter can cast doubt. Consistency and transparency matter—so understanding your financial story and being able to explain it clearly is essential if you want to justify a premium price.
Even if a sale isn’t on the immediate horizon, it’s smart to get a valuation. Life happens—health changes, partnership disputes, legal situations—and being prepared can make all the difference. I’ve seen too many businesses forced into rushed sales with no clarity on value, and it almost always leads to disappointing results.
Valuations are powerful tools beyond just the sale. Whether you're planning a partner buyout, securing key man insurance, managing your estate, or just want a benchmark for your growth—a current valuation gives you that snapshot. And when tracked over time, it can reveal trends, risks, and opportunities that might otherwise go unnoticed. In short, valuations help you plan—not just react.
Knowing what your business is worth—and when to get that number—can have a huge impact on your future. It’s the foundation for smart growth, better decisions, and a confident transition, whenever the time comes.
Schedule a consultation and let’s talk about your business.