What is My Business Worth?
One of the most important steps in selling a business is establishing the right pricing strategy. Price a business too high and you risk limiting buyer interest. Price it too low and you may leave value on the table. Getting this right from the outset sets the tone for the entire transaction.
At Evolution Advisors, we work closely with business owners at the beginning of the process to assess the business, review the available financial and operational information, and apply our market experience to determine an informed view of value. Every business is different, and pricing strategies vary depending on the company’s size, industry, growth profile, and the seller’s goals.
In some cases, a defined asking price is appropriate. In others, we may recommend taking the business to market using a competitive or bid-based process to establish a market-driven benchmark. Our role is to provide clarity, context, and practical guidance so sellers understand their options and can make confident decisions.
Our approach is collaborative and advisory. We evaluate what the seller has today, share insights from comparable transactions and current market conditions, and help develop a pricing plan aligned with both market realities and the seller’s personal objectives—so they can move forward with confidence for themselves and their family.
A conversation with Evolution Advisors is the first step in valuing your business. Call us or use the contact form to get started.
Contact Evolution Advisors Today
At Evolution Advisors, we’re in touch daily with networks of thousands of buyers and sellers, both globally and locally as well as other M&A Advisors throughout the country. As a result, we have a pulse on what’s really happening in the business of selling a business.
How is the Price Determined?
Fundamentally, a buyer purchases a business for income or cash flow. Cash flow can be expressed in many ways, typically either as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) or Seller’s Discretionary Earnings (SDE).
In business transactions, the size of the business determines whether SDE or EBITDA is used as the basis for valuation. We start with whichever metric is appropriate for your business, as this is the most common foundation for establishing a price to take your business to market.
Profitability
EBITDA
Earnings Before Interest, Taxes, Depreciation & Amoritization
Shows: The true operating profitability of your business before financing and accounting decisions
Common in: Middle-market transactions
SDE
Seller's Discretionary Earnings
Shows: Total financial benefit to a single owner-operator, including salary, benefits, and discretionary expenses
Common in: Lower middle market transactions
Risk Factors
Market Position
Customer Concentration
Does one client represent more than 15% of revenue?
Key Employee Dependence
Can the business operate smoothly without specific individuals?
Owner Involvement
Vendor Relationships
Legal & Compliance
Are there pending issues, regulatory risks, or IP concerns?