What’s Your Business Really Worth? 

Hey, business owner, let’s cut to the chase. Do you know what your business is worth? Not a ballpark guess, but a real, data-backed number. Most owners don’t, and it’s a costly mistake. McKinsey’s valuation insights show 60% of small business owners underestimate their value in 2025, leaving millions on the table during sales, funding, or succession. Underestimate your business value and you could spend countless years working when you could be enjoying life. Overestimate and you could miss out on the time to upgrade the business to have a rewarding retirement instead of simply existing. It’s like running a race without knowing the finish line—you’re setting yourself up to lose. Let’s build a system to nail down your worth and use it to make smarter decisions.

Why does this matter? Your business’s value isn’t just a number; it’s your leverage for selling, raising capital, expanding, or planning retirement. Deloitte’s M&A trends say accurate valuations boost deal success by 20%. Without one, you’re guessing, and that’s risky. So, how do you get there? It’s not rocket science, but it takes discipline and a clear process.

Start with your financials. Pull your revenue, profit, and cash flow statements for the last three years. If your books are a mess, use tools like QuickBooks to organize them. This step is non-negotiable—clean financials reveal hidden opportunities or problems. Case Study: A small retailer audited their financials and uncovered $120K in untracked revenue from an overlooked product line, boosting their valuation by 15%. Your KPI: achieve 100% financial transparency within 30 days. That means every dollar in and out is documented, no excuses.

Next, take stock of your assets and liabilities. Assets include physical items like equipment, inventory, and property, plus intangibles like customer lists, brand reputation, or proprietary processes. Liabilities are debts, loans, or ongoing contracts. Don’t skip the small stuff—a forgotten lease or undervalued patent can swing your value by thousands. Set a KPI: complete this audit in 14 days. Use a simple spreadsheet to list everything, and double-check with your accountant to ensure accuracy.

Now, let’s dive into valuation methods. A straightforward approach is the revenue multiple—typically 1–3x annual revenue for small businesses, depending on your industry. For example, a retail business might use 1.5x, while a tech firm could hit 3x. Another method is discounted cash flow (DCF), which projects future earnings based on current performance. Free tools like BizBuySell or online calculators can give you a starting point, but they’re not enough. Get a professional valuation from an accountant, your business coach, or advisor to refine your number. McKinsey notes businesses with third-party valuations see 25% higher offers in deals.

Once you have your value, track it like it’s your business’s pulse. Build a dashboard - in software like Google Sheets - to monitor revenue trends, profit margins, and asset growth. Update it quarterly to see how changes like new products or cost cuts affect your worth. Businesses that track this regularly make 20% better decisions, whether it’s expanding or exiting. 

But it’s not just about the sale. Knowing your value helps you spot weaknesses early. Maybe your liabilities are too high, or your brand’s undervalued. You can fix those now. It also gives you confidence in negotiations—whether you’re pitching to investors or renegotiating vendor terms. The process might feel overwhelming, but it’s manageable if you break it down. If you’re stuck, a 15-minute call with an advisor can point you in the right direction. The key is to start now—don’t wait until you’re forced to guess.

Here’s what you gain: clarity, control, and opportunity. A business with a known value is a business ready to grow, pivot, or exit on your terms. Don’t leave money on the table. Get disciplined, get your number, and use it to drive your next move.

Action Steps:

1. Pull one financial statement today.

2. List all assets and liabilities this week.

3. Run a valuation method by month’s end.

4. Set up a quarterly tracking dashboard.

5. Reach out to your coach or advisor for any questions and suggestions.

John Davis - Business Coach

With years of experience helping leaders and entrepreneurs, I’m passionate about showing you how to Build A Business for Your Ideal Life. At Davis Business Coaching, we help owners align their ventures with personal dreams so true success becomes your everyday reality.