Ever tried to put a price tag on something you poured your soul into? Yeah, me too. It’s like trying to sell your dog. You know he’s priceless, but someone’s gonna ask, “Okay, but what’s the market value?”
A few years back, I found myself knee-deep in spreadsheets, bank statements, and a really sketchy “valuation calculator” I found online (spoiler: don’t do that). I’d built my small logistics company from a two-man garage hustle to a mid-six-figure operation. Then one day—after a weirdly inspiring podcast and a rough month of burnout—I started wondering what it was worth.
And let me tell you: figuring that out was one heck of a rollercoaster.
So, if you’re in the same boat—whether you’re selling, raising capital, planning an exit, or just want to know—this post’s for you. No jargon. No fluff. Just a real talk breakdown of how to value your business like a boss… and not get played.
Why Even Bother Knowing Your Business’s Value?
Let’s keep it 100—most business owners (especially us gritty, self-made types) don’t think about valuation until we’re forced to. This is not good because it’s important to know what your business is worth when it comes time to sell. Knowing your number gives you options. Leverage. Peace of mind.
It’s like checking your FICO score. You might not want to know, but ignoring it won’t help.
For me, once I saw the number (after the emotional whiplash of “Is that all I’m worth?”), it flipped a switch. Suddenly, I was negotiating smarter, watching margins like a hawk, and saying “no” to offers that didn’t match my value.
Moral of the story? Knowing your worth gives you power. Period.
Step 1: Know What Buyers Actually Care About
Here’s where most folks screw up (myself included): We think our years of hard work = value. But buyers? They don’t care that you missed your kid’s soccer games or pulled all-nighters during COVID.
They care about this:
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Profitability: Specifically EBITDA (earnings before interest, taxes, depreciation, and amortization). Sexy, I know.
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Growth potential: Can this thing scale without burning to the ground?
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Customer base: Loyal? Recurring? Or do they disappear faster than a TikTok trend?
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Systems: Can the business run without you—or are you the glue?
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Industry multiples: What’s the going rate for a biz like yours in your niche?
Real talk? That last one smacked me the hardest. I thought I was worth 7-figures. Turns out, companies in my space were going for 3x earnings. Not 10x. Not “Shark Tank money.” Just a humble three times.
Step 2: Clean Up Your Financials (Seriously, No More Shoeboxes)
I’m not trying to call anyone out, but if your books are a mess… it’s time to grow up. (Love ya, but it’s true.)
When I first sat down with a business broker, I handed over a Google Drive folder labeled “MISC_Receipts” and a Profit & Loss statement with more holes than Swiss cheese.
His face? Think “high school math teacher dealing with a kid who forgot his homework… again.”
What you need:
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Two to three years of clean P&Ls and balance sheets
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Tax returns (yes, the real ones, not the “optimized” versions for Uncle Sam)
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Owner add-backs: These are expenses that would disappear if someone else ran the biz (like your gym membership or the truck you wrote off as a “marketing expense” )
Pro tip: Get a legit accountant. Best $2K I ever spent.
Step 3: Use Multiple Valuation Methods (Don’t Put All Your Eggs in One Calculator)
Okay, so here’s where it gets a little nerdy—but stick with me.
There’s no one-size-fits-all valuation formula, but here are the biggies:
1. SDE (Seller’s Discretionary Earnings)
Best for small businesses under $1M in profit. This adds back things like your salary, perks, one-off expenses, etc. Think of it as “what the owner actually makes.”
Formula:
SDE x Industry Multiple = Estimated Value
If your SDE is $200K and your industry multiple is 2.5x → You’re looking at $500K.
2. EBITDA Multiples
More common for larger companies or ones with management teams in place. It’s cleaner, more “corporate.”
3. Comparable Sales (“Comps”)
Basically: what did businesses like yours sell for? You can find comps through business broker sites or marketplaces like BizBuySell.
4. Asset-Based Valuation
Good if your business owns a lot of equipment or real estate. But if you’re a service biz or online entrepreneur, this one usually undervalues you.
My recommendation? Use at least two methods and average them out. One number will be too low, one will be too high… and somewhere in the middle is the sweet spot.
Step 4: Get a Second Opinion (Ego Check Time)
I’ll be honest—this was the hardest part for me.
I sat there thinking, “If I say it’s worth $800K, why wouldn’t someone just pay that?”
Because… they won’t. ♂️
Reality check: Buyers want proof and third-party validation. So I brought in a broker and had a business appraiser give me the cold, hard truth. They didn’t sugarcoat it—and thank God for that.
Their number was about 10% lower than I expected. Not brutal, but enough to make me take another hard look at my revenue streams and customer churn.
So yeah—get someone objective to poke holes in your assumptions. That’s how you grow.
Step 5: Watch Out for Red Flags (They Tank Value Fast)
I call these “deal-killers in disguise.” They don’t show up in the numbers, but buyers will sniff them out in 5 minutes:
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Overreliance on you (If the biz falls apart when you take a vacation… yikes.)
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One big client making up 50% of revenue (Been there, almost lost a deal over it)
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Outdated tech or systems (Still using paper invoices in 2025? Come on.)
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Pending legal issues or debts (Don’t hide ‘em—they’ll surface eventually)
These things don’t mean you can’t sell. But you might have to fix them first—or take a haircut on your price.
Wrapping It Up: What’s YOUR Business Worth?
Listen, figuring out your business’s value is kind of like stepping on a scale after the holidays. A little scary, a little humbling—but totally necessary if you want to make moves.
Here’s the deal:
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Get your books in order
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Use legit valuation methods (not back-of-napkin guesses)
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Know your industry multiple
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Be brutally honest about risk
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Get professional help when needed
You don’t have to be a Wall Street whiz to do this. I’m just a dude who once tracked expenses in a notebook and thought QuickBooks was optional.
Now? I know my number—and it’s helped me grow smarter, lead better, and sleep like a baby (well, one that doesn’t wake up screaming every two hours).
Final Thought: You’re Not Just Building a Business—You’re Building an Asset
Treat it like one. Know its value. Nurture it. And when the time comes to sell or scale?
You’ll be ready—with no guesswork, no regrets, and a number you can proudly stand behind.
Got questions or want help figuring out your valuation? Drop a comment or hit me up—I’ve been in the weeds, and I’ve got receipts.