Mind The Value Gap: 5 Steps To Find Out What Your Business Is Worth
Here’s a hard truth: Most small business owners don’t know what their business is worth. And worse, they overestimate it. If you’ve ever guessed the value of your business based on gut feel, a buddy’s exit, or something you heard at the golf club, this article is for you.
Getting a realistic business valuation isn’t just about selling your business. It’s about understanding the real value of the thing you’ve spent years building, and how to grow that value strategically from here.
Let’s walk through the five essential steps to finding out what your business is really worth—and what to do next.
Step 1: Get a Data-Driven Valuation (Not a Guess)
Most business owners fall into the same trap when estimating their business value:
They use generic "rules of thumb."
They base it on how hard they’ve worked or how much they’d like to sell the business for.
They compare it to a friend’s exit (without understanding the full context).
That approach doesn’t hold up under scrutiny of a business buyer.
The good news is you don’t need to talk to a business broker or pay a consultant to get a starting point. Instead, get our free and independent business valuation to give you a valuation range based on thousands of real business exits and benchmarked against market- and sector-adjusted data.
Step 2: Understand What Drives the Value Gap
The Value Gap is the difference between what you think your business is worth and what it’s actually worth on the open market.
Your business might be worth less than you think because:
You’re still essential to daily operations.
Your business doesn’t have recurring revenue.
Profit margins are low or inconsistent.
There are risk factors like no documented systems, client concentration, or lack of growth.
Use a business valuation as a mirror. Reflect on which of the above red flags apply to your business today. Not to feel bad about them, but to start improving them.
Step 3: Benchmark Against Other Businesses
Knowing where you stand in the wider market is critical. Get your hands on anonymized data from other businesses like yours. Ask yourself: “What multiples are normal in my industry? And where does my business currently sit on that spectrum?”
Step 4: Know What You Can—and Can’t—Control
Here’s the tough love: you don’t get to control the market. But you do get to control how your business shows up in that market.
What you can’t control:
The average multiple in your industry or region
Broader economic trends
How business buyers feel about your sector
What you can control:
Profitability
Systems and documentation
How involved you are in the day-to-day
Customer concentration
Year-over-year growth
Focus your energy here. The businesses that grow in value year after year are the ones that improve what they can actually influence.
Step 5: Use Your Business Valuation as a Strategic KPI
If you got an independent business valuation and the number you got surprised you, don’t take it personally. Use it as a baseline. Just like you track revenue, leads, or margins, start tracking your valuation. Revisit it every 12 months. Build it into your annual planning process.
Ask: “What will it take to move me into the top of my valuation range?”
Make it a game. Then build your business like a player aiming to win.
Conclusion: Close The Value Gap and Change Your Future
Knowing your business value isn’t just about selling, it’s about showing up as a more strategic, informed, and empowered business owner today. If you find there’s a gap between your expectations and the market reality, don’t panic. Plan.
And remember, most business owners never sell because they’re not ready. But the ones who are? They walk away with life-changing deals. Start now. The valuation may surprise you, but what you do with it is where the magic happens.
