There are three broad approaches to valuing a business. In the real world of small and mid-market sales, one of them decides your price and the other two support it.
1. Earnings-based (the one that matters)
Most businesses sell on a multiple of earnings — SDE or EBITDA — adjusted for risk and growth. See how multiples work.
2. Market-based
Comparable sales of similar businesses provide a sanity check on the earnings multiple. Real transaction data beats rules of thumb.
3. Asset-based
For asset-heavy or underperforming businesses, equipment, inventory, and real estate set a floor. For healthy operating businesses, earnings usually produce a higher number.
A real valuation blends these into a defensible range — our team gives you that number for free.