“Am I sitting on a goldmine… or a glorified lemonade stand?” That’s the question I asked myself at 2:17 AM while staring at my ceiling fan, which, ironically, was spinning faster than my thought process.
I had built this business from scratch—blood, sweat, overdrafts, and an unhealthy amount of black coffee. But now, with whispers of selling floating around in my head like smoke from an old cigar lounge, I had no clue what the thing was actually worth.
So, here’s the raw, unfiltered truth of what I found—numbers, emotions, near-panic attacks and all.
What Business Valuation Really Means (Spoiler: It’s Not Just About Revenue)
Let’s start with the biggest misconception I had: “Just multiply my net income by some magic number and boom—that’s the value.”
Yeah, no. 😅
Turns out, valuation is like dating. It’s part hard facts (your income, your assets), and part vibes (how attractive your business looks to buyers). When I spoke to a local broker, they hit me with this line: “A business is worth what someone’s willing to pay—and what you’re willing to accept.” Simple, brutal, true.
They broke it down into a few key areas:
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Cash Flow – Not just revenue, but how much cash I was actually keeping.
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Assets & Inventory – Turns out, those old shelves in the back did count.
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Customer Loyalty – Recurring clients? That’s gold. One-off buyers? Meh.
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Market Positioning – Are you the hotshot in town, or just another player?
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Owner Involvement – If I had to show up every day to keep it alive… that slashed value real quick.
The Day I Googled “How to Value a Small Business” and Fell Into a Rabbit Hole 🕳️
Okay, full confession—I tried to DIY this whole thing at first.
I downloaded a “free valuation calculator” from some website that looked like it hadn’t been updated since MySpace was cool. I plugged in some numbers (a little generously, I’ll admit), and it spit out a seven-figure estimate.
I was pumped. I strutted around like I’d just won the entrepreneurial lottery.
Then I showed that number to an actual advisor and got the look. You know the one—like I’d told them I just invested my 401(k) in Beanie Babies.
They told me: “You’re using multiples without understanding what drives them.”
Here’s what they meant:
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SaaS company with recurring revenue? You might get a 5x multiple.
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Mom-and-pop service business tied to one zip code? Maybe 1x to 2x, if you’re lucky.
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Me? I was somewhere in the middle, with just enough recurring customers to keep a buyer interested, but not enough to make them throw cash at me.
Ouch. But fair.
Emotional Attachment Will Lie to You (And Buyers Know It)
Here’s where it gets personal.
I had convinced myself that my business was priceless. After all, I lived it. Every weekend sacrificed, every midnight oil burned—it all added up, right?
Not to the market.
Buyers don’t pay for your stress. They pay for profit, growth potential, and whether or not you’ve created a machine that runs without you.
And let me tell you, hearing “Your business is basically a really demanding job” felt like a slap in the ego.
But that was the moment things shifted.
I started viewing the business like a product. Something clean, functional, desirable. Not a diary of my hustle, but a machine that could be sold.
The “Real” Number: What I Was Actually Worth
After all the soul-searching, spreadsheet-wrangling, and professional consultations, I finally landed on a realistic range: about 2.3x my SDE (Seller’s Discretionary Earnings).
That meant: My salary + perks + profit + any “funny money” I ran through the books (hello, “business” lunches 🍔).
It wasn’t the number I dreamed of, but it was fair. It was solid. And most importantly, it was something I could defend in front of a buyer without sweating through my shirt.
What I’d Tell a Friend Asking, “How Much Is My Business Worth?”
If you’re reading this and wondering what your number is, here’s the raw truth:
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Don’t trust your gut. Trust your books.
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Get an outside perspective. You’re too close to see straight.
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**The market doesn’t care what you feel. It cares what you earn. **
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If your business can’t run without you, it’s not a business. It’s a job.
And one more thing?
Get your house in order early. Buyers love clean books, smooth systems, and low drama. Think of your business like a house on Zillow—clutter kills offers.
Final Thoughts (a.k.a. Me Getting Sentimental)
I started this journey thinking I was about to sell a unicorn. What I discovered was a decent, hardworking mule—and you know what? That’s okay. Mules are strong, reliable, and get the job done.
Whether you’re months or years away from selling, start asking the hard question now: What’s it really worth?
Because the answer might not be what you expect—but it’ll be what you need to hear.
And hey… if you ever need someone to talk you off the ledge after your first “real” valuation? Been there. Still got the stress rash to prove it. 😅
Let’s just say, I’m older, wiser, and slightly more humble now.
And yeah—I’d totally do it again.