What Is My Business Worth?
A Ball-Park Valuation & Increasing Value
How Much is Your Business Worth?
Over 87% of business owners don’t know what their business is worth, but over 80% plan to fund their retirement with the proceeds. Others are not looking to retire, but want to invest the funds in other ventures. Regardless, it starts by knowing what you can get for the business.
In addition, when comparing business worth, some are much more valuable than others. Some have a better location, some are more self-sustaining (can grow even without the owners day-to-day involvement). Others have superior products or services, or better brand equity.
Some business have better operations, while others have holes that can easily be fixed and can dramatically increase their selling value with the right help.
How We Help?
Vendere Advisors can help complete a business valuation–providing a good ballpark valuation, (a reasonable estimate) of what your business can sell for. It is often started by viewing business comps of similar businesses, and by a series of valuation approaches.
All said and done, a business is worth what someone is willing to pay for it. We help you assess this value, but also help you increase it.
Some recommendations are quick, with easy and noticeable gains (for example, re-finishing a kitchen in a home tends to provide the seller with the highest ROI), or having a perfect yard with flowers (adds 5-12% to the sales price), while other fixes might take longer.
Top Five Things to Increase Value
As an example, the top five things that can increase the value of a business might include the following:
1. Strong, growing, recurring revenue
Businesses with predictable income (subscriptions, repeat customers, retainers) are usually valued at 3–10x higher than those relying on one-off sales.
2. Clean Financials (Audited or Well-documented)
Buyers need to trust the numbers. Good bookkeeping, clean tax returns, P&Ls, and no “weird” expenses (e.g., personal trips through the business) can add 10–30% more value.
3. Owner Independence (Business Runs Without You)
If your business runs smoothly without your daily input, it’s worth 30–50% more. Buyers want an asset, not a “job.” Solid teams, documented processes, and management layers make it attractive.
4. Growing Trends & Clear Market Position
If your company shows growth (even modest) and operates in a growing sector, buyers pay more. Clear value proposition and competitive advantage adds another 10–25%.
5. Customer Diversification (No single “Whale”)
If one customer makes up more than 20–25% of revenue, buyers get nervous. A diversified customer base reduces perceived risk and increases value by 10–20%.
Bonus Factors Include
- Contracts in place (especially recurring ones)
- Brand strength and online presence (good reputation = higher multiples)
- Low customer churn rate (loyal customers = stability)
- Proprietary products, intellectual property, or strong partnerships (barriers to entry)
- Growing profit margins (not just growing revenue)
Real World Example
Two nearly identical businesses in revenue:
- Business A is owner-dependent, messy books, declining customers → sold for 2.1x EBITDA.
- Business B has growing recurring revenue, independent team, great books → sold for 5.3x EBITDA.
That’s the difference between selling a business for $2 million vs $5 million. Scale this up or down according to your business type, and the ratios are similar. Fixing several areas still shows a significant difference in the business value–regardless of your selling price.
It’s What We Do
Fortunately, helping you understand your business worth, and increasing your value short-term or long-term (even 6 months), and determining and getting the highest selling price is what we do.
Please reach out for a FREE Consultation where we can “see what you’ve got” and if we can help.