What Is My Business Worth? How to Get a Realistic Valuation (Without the BS)
Why This Question Matters
If you’re asking “what is my business worth?”, you’re not alone.
It’s one of the first questions business owners ask when they start thinking about selling, and one of the most misunderstood.
Spoiler alert: It’s not just about revenue.
It’s about risk, systems, and transferability.
The Truth About Business Valuations
Let’s start by killing a common myth:
Your business is not worth 2× revenue. That’s a lazy guess.
Buyers don’t pay for sales.
They pay for profitability, stability, and future potential.
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Discover the levers that actually move your valuation multiple. In this episode of Built to Sell | Built to Buy, Sam breaks down the numbers, the metrics, and the mindset that will boost your business worth—whether you're planning to sell soon or just want to build a more valuable business.
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How Business Valuation Actually Works
Most businesses are valued using this simple formula:
EBITDA × Industry Multiple = Enterprise Value
- EBITDA = Earnings Before Interest, Taxes, Depreciation, Amortisation
- Industry Multiple = A number based on how businesses in your sector typically sell
Example:
If your EBITDA is $500,000 and your industry commands a 3.5x multiple:
$500,000 × 3.5 = $1.75 million
But here’s where it gets interesting…
What Drives (or Destroys) Your Valuation
1. Owner Dependence
If you’re the engine, you’re also the risk.
A buyer wants to buy a business, not a job.
- Document systems
- Train key staff
- Delegate decision-making
2. Financial Hygiene
Sloppy books = lower trust = lower multiple.
- Clean P&Ls
- Remove personal expenses
- Up-to-date BAS, tax returns, and payroll
3. Growth Story
Buyers pay for the future.
- Show upward trends
- Forecast future earnings
- Highlight untapped markets or products
4. Recurring or Predictable Revenue
Stable income means less risk for the buyer.
- Subscriptions
- Contracts
- Repeat customer base
5. Customer & Supplier Concentration
If one client or supplier makes up >20% of your revenue or stock? Risky.
- Diversify relationships
- Lock in agreements
6. Legal & IP Cleanliness
Unregistered trademarks, expired leases, or no employment agreements can torpedo deals.
- Register your IP
- Tighten your structure
- Fix outdated contracts
What Hurts Your Valuation
- No handover plan
- Unclear financials
- High staff turnover
- Legal disputes
- Flat or declining revenue
- Lack of digital presence or systems
These aren’t just red flags; they’re discount triggers.
What About Online Valuation Tools?
Most online calculators give vague estimates, usually based on revenue or oversimplified formulas.
They’re a starting point, but not enough to:
- Negotiate a deal
- Set your asking price
- Make serious strategic decisions
Want a Smarter, More Accurate Estimate?
That’s why I built the Business Valuation Report, it gives you:
- Your likely valuation range (based on real multiples)
- A breakdown of what’s helping or hurting your value
- Immediate actions to lift your sale price
Plus, you can get a Business Sale Readiness Report alongside it to see how “buyer-ready” you really are.
What’s Next?
If you're thinking about selling, or even just preparing to, here's what to do:
- Download the Business Valuation Report
- Complete your Sale Readiness Score
- Book a 30-minute Exit Strategy Call with me
Before You Go
What’s your business worth?
That depends on what you’ve built, and what risk you're handing over.
The sooner you understand your valuation, the sooner you can start increasing it.