Why there’s no hard number yet
A business valuation can’t only be a formula. It’s ultimately a negotiation between what your business has done and what a buyer believes it will do – filtered through how much they want it, how many other buyers are in the room, and how the deal is structured.
Two identical businesses can sell for very different numbers depending on who’s buying, when, and why.
What we actually look at
From a numbers perspective, the starting point is earnings – specifically, what the business actually produces for an owner after you adjust for the things that are personal, one-time, or non-recurring. That adjusted number is what buyers apply a multiple to.
The multiple depends on size, industry, growth trajectory, customer quality, and how transferable the business is. It can range meaningfully even within the same sector. Getting it right requires knowing who the buyers are and what they’re paying right now – not what an AI bot says.
The goal of the first conversation is to give you a proper picture.
What’s driving value. What’s discounting it. What the realistic range looks like under current market conditions. And whether there’s a gap between what you’re expecting and what the market will bear because that gap, if it exists, is better to know about now.
That’s the conversation worth having. And it starts exactly where you’d expect: with the question every founder asks.
Ready to understand what your business is worth? Schedule a conversation
Richmond Partners is an M&A advisory firm working with founder-led and family-owned businesses.
This article is for informational purposes only and does not constitute financial, legal, or investment advice.
