Learn how buyers evaluate a business, what drives value, and which financial, operational, and market factors can affect the final sale price.
Business Valuation
There is no single number that applies to every business. Most small and mid-sized service businesses are valued using a multiple of the cash flow the owner actually takes home, adjusted for the company's risk, growth, and how much it depends on the owner. A qualified appraiser or business broker can give you a defensible number based on your specific financial records and market conditions.
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A business that depends on one customer for a large share of its revenue is considered riskier by buyers, because losing that customer could significantly hurt future earnings. This usually leads to a lower valuation, a longer due diligence process, or deal terms that shift more risk onto you, such as an earn-out tied to future performance.
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