Do You Know What Your Business is Worth? Most Owners Don’t.
If you’re like most small and mid-size business (SMB) owners, you’ve spent years—maybe even decades—building your business. You know how much money is in your bank account. You know your monthly revenue. But if someone asked you, “What’s your business worth?”—could you give them a confident answer?
For 98% of business owners, the answer is no. And that’s a problem.
Most owners assume business valuation is something you only need when you’re selling. But the truth is, knowing your business’s value helps you make better decisions every day—whether you’re planning for growth, seeking investment, or just trying to build a stronger, more resilient company.
A business valuation isn’t just about the number. It’s about understanding your worth, protecting your future, and making informed choices that move you forward.
What is Business Valuation, and Why Should You Care?
Business valuation is the process of determining what your company is worth, based on a combination of financials, industry trends, assets, and market conditions.
But let’s make this real. Here’s why valuation matters to you:
- Selling or Succession: You don’t want to find out at the last minute that your business isn’t worth as much as you thought.
- Raising Capital: Investors and lenders won’t put money into a business if they can’t clearly see its value.
- Growth Planning: How can you improve your business if you don’t know where you stand?
- Risk Management: If something happens to you, does your family know what your business is worth? Will they get a fair price?
Most business owners don’t get a valuation until a life event forces them to—a lawsuit, a divorce, retirement, or a business downturn. But by then, you’re reacting instead of planning.
A valuation isn’t just about preparing for the future—it’s about having control over it.
How Do You Determine the Value of a Small Business?
Valuing a business isn’t just about looking at revenue or profit. Different buyers, investors, and situations require different ways of calculating business value.
At its core, business valuation comes down to four key types of value:
1. Equity Value: The Full Business, Assets, and Liabilities
Equity Value represents the total worth of your business, including:
✔ Inventory, supplies, fixed assets, and intangible assets
✔ Liquid financial assets (cash, accounts receivable)
✔ Less all liabilities (debts, obligations)
What this means for you:
This is the value if someone were to buy your entire company as-is, taking on both the assets and liabilities.
2. Asset Sale Value: The Business, Without the Debt
This valuation considers only the tangible and Intangible business assets—but excludes liquid financial assets and liabilities.
What this means for you:
If you sell your business under this model, you keep the cash and accounts receivable, while delivering the business free and clear of all debt. The buyer starts fresh with a new legal entity.
3. Enterprise Value: The Business as a Functioning Entity
Enterprise Value reflects the market value of your company as an ongoing business—including assets, operations, and revenue-generating potential.
Why this matters:
This valuation is useful when comparing businesses with different levels of debt, as it focuses on the core value of operations rather than ownership structure.
4. Liquidation Value: The Business, If Sold Piece by Piece
Liquidation Value is the estimated amount you’d receive if you had to sell all assets immediately due to insolvency or business closure.
What’s included:
✔ All assets (inventory, equipment, real estate)
❌ Accounts receivable and some intangible assets are often excluded
Why this matters:
While no one plans to liquidate, understanding this number helps you assess your downside risk and make better long-term financial decisions.
Which Valuation Method is Right for You?
Different situations require different ways of looking at your business’s worth.
- Selling your business? Buyers will focus on Equity Value or Asset Sale Value, depending on the deal structure.
- Bringing in investors? They’ll likely care most about Enterprise Value, as they want to know the return on their investment.
- Planning for worst-case scenarios? Liquidation Value helps you understand your financial safety net.
Most comprehensive valuations look at multiple value types to give you a full picture of your business’s worth.
Why This Matters for You
Many business owners guess at their business’s value—but when the time comes to sell, get financing, or plan for the future, an accurate valuation can be the difference between a great outcome and an expensive mistake.
The good news? You don’t need to wait until you’re selling to get a valuation. Understanding your business’s worth now puts you in control—so when the time comes, you’re ready.
What Factors Affect the Value of Your Business?
Two businesses with the same revenue can have completely different valuations. Why? Because valuation isn’t just about numbers—it’s about the strength and sustainability of your business.
Here’s what impacts your value:
- Revenue & Profitability – Consistent growth and strong profit margins increase value.
- Customer Base – A business with repeat customers is worth more than one with high turnover.
- Market Position – Strong branding and competitive advantage make a company more valuable.
- Operational Efficiency – Well-run businesses with clear processes attract higher valuations.
- Owner Dependence – If your business can’t run without you, buyers see it as risky.
Why Owner Dependence Lowers Your Business’s Value
A business that relies too much on the owner scares off buyers and investors. They see it as a risk—what happens if you leave?
To increase valuation, business owners should:
- Build a leadership team that can run things without you.
- Develop documented processes so the business runs smoothly.
- Transfer customer relationships to other team members.
The less the business relies on you, the more valuable it becomes.
When Should You Get a Business Valuation?
Many business owners don’t think about valuation until they’re selling—but by then, it’s often too late to maximize value.
You should consider getting a valuation when:
- You’re preparing to sell, merge, or acquire another business.
- You want to bring in investors or secure financing.
- You’re planning for retirement, succession, or estate planning.
- You need a valuation for insurance or tax purposes.
- You want to identify areas for growth and increase profitability.
How Much Does a Business Valuation Cost?
Traditional business valuations can cost anywhere from $8,000 to $30,000—which is why many owners avoid them.
Why Business Owners Avoid Valuations (and Why That’s a Mistake)
- Too Expensive – Many believe valuations are only for big corporations.
- Too Time-Consuming – Traditional valuations can take weeks or months.
- Too Complicated – Gathering financials and dealing with accountants is overwhelming.
- Not a Priority – Many owners assume they’ll “deal with it later”—but later is often too late.
A Faster, More Affordable Alternative: The Owners Value Report
We’ve designed a smarter, more efficient way to value your business.
Our Owners Value Report gives you a comprehensive, data-driven valuation at a fraction of the cost—starting at $3,500.
✅ Four valuation estimates: Asset Value, Equity Value, Enterprise Value, and Liquidation Value.
✅ Industry benchmarks & competitive insights using over two dozen data sources.
✅ 13 Key Performance Indicators (KPIs) to measure how your business stacks up.
Unlike traditional valuations, ours is fast, efficient, and collaborative—without taking weeks of your time.
How to Increase the Value of Your Business
If you’re not happy with your valuation, don’t panic. Business value isn’t fixed – you can increase it with the right strategies.
Here’s how:
✔ Reduce owner dependence by creating leadership and operational systems.
✔ Improve financial performance through revenue growth and cost efficiency.
✔ Strengthen customer retention with long-term contracts and loyalty programs.
✔ Invest in intellectual property (trademarks, patents, proprietary processes).
✔ Optimize operations with automation and documented workflows.
A business valuation isn’t just about knowing your number—it’s about using that knowledge to build a stronger, more valuable company.
Final Thoughts: What’s Your Business Worth? It’s Time to Find Out.
Most business owners don’t know their company’s value until they have to – and by then, they’ve lost the opportunity to improve it.
A valuation gives you clarity, control, and confidence—so you can make smart, strategic decisions about your future.
Want to know what your business is worth—and how to increase its value?
Let’s talk. We’ll walk you through it—no pressure, no obligation. Just clarity.