If you’re a business owner, it’s a question that will likely keep you up at night at some point: How much is my business really worth? You’ve poured years of energy, talent, and sacrifice into building your company—so when it comes time to consider an exit, how do you know what’s fair? And perhaps more importantly, how do you make sure you don’t leave value on the table?

As someone who’s spent the last thirty years buying and selling businesses—both for myself and for clients—I’ve seen too many entrepreneurs make the same mistakes. The truth is, more than half of business owners who sell regret the outcome, most often because the value they received didn’t meet their expectations. Even more alarmingly, according to brokers and corporate finance houses, some 65% of businesses that are put on the market never sell at all and circa 50% of those that do manage to sell claim to be dissatisfied with the outcome post sale.

Why is this? In my experience, it usually comes down to a lack of preparation, unrealistic expectations, and not understanding how value is really determined.

It’s Not What You Think

Let’s start by dispelling a myth: your business isn’t worth whatever number you’ve got in your head, or what your friend got when they sold a vaguely similar company last year. Your business is, quite simply, worth what the best buyer is prepared to pay for it - at the time you’re ready to sell. That figure is shaped by a complex mix of your company’s fundamentals, market conditions, buyer motivations, and how well you prepare.

But it’s also a deeply personal question. Too many business owners start the process thinking about a number, not a purpose. Ask yourself: why are you considering selling? Is it financial security, a change of lifestyle, a shifting market, or personal fulfilment? Unless you know your ‘why’, you can’t possibly know what you need your business to be worth for you​ to exit.

The Biggest Blind Spot

A few years ago, I met Robert and Susan, a couple running a thriving online business. They came to me ready to sell and retire. But when we sat down and looked at their numbers - and, crucially, their plans for supporting a daughter with a lifelong disability - it quickly became clear their expectation of their company’s value simply wouldn’t provide the lifestyle and security they needed. The gap wasn’t a matter of optimism or pessimism; it was a lack of formal valuation and planning. Like most owners, they’d never had a professional valuation.

Research shows 58% of business owners have never had their company formally valued​. That’s astonishing, considering for most entrepreneurs, their business represents 80–90% of their personal wealth. If you don’t know your true value, how can you plan your future - or even negotiate effectively?

How Do Buyers Think About Value?

When it comes to valuation, buyers are not looking at your company through the same lens as you do. Their primary focus is risk and reward: what kind of return can they expect, and how certain is that return? This is why buyers - whether they’re individuals, strategic corporates, or private equity firms - analyse your business using a combination of financial and operational metrics.

The Exit Roadmap identifies ten key drivers of business value:

1. A history of strong growth
2. The potential to scale up
3. Recurring or contracted revenues
4. Positive market positioning and differentiation
5. Low reliance on key staff
6. Low reliance on key customers
7. Low reliance on you, the owner
8. Healthy working capital
9. High customer loyalty
10. Protected intellectual property

The more you can strengthen these drivers - and reduce the risks associated with each - the higher your business will be valued. A well-prepared, low-risk business attracts more buyers, creates competition, and ultimately commands better offers​.

What About Valuation Methods?

There are six primary ways your business might be valued, ranging from discounted cash flow (DCF) to EBITDA multiples, to comparison with similar transactions. Each method has its place, but all rely on objective data - recent performance, future projections, and market benchmarks.

Too often, owners latch onto a headline multiple they’ve heard at a networking event and apply it blindly to their own business. But a “similar” business in a different sector, region, or stage of growth can have a wildly different value. Strategic buyers may pay a premium for synergies, while financial buyers will focus on stable, repeatable cash flows.

If you’re planning to sell - or just want to know where you stand - invest in a proper, independent valuation. Work with professionals who understand both the financial and operational aspects of your business, and who have experience in your sector. Then, revisit your plans: will the likely sale value enable the lifestyle or next chapter you’re seeking? If not, you may have work to do before going to market.

Value Is a Journey, Not an Event

One of the biggest lessons from my three decades in this field is that building value is a journey, not a one-off event. Most business owners are too busy working in the business to work on it. But if you want to maximise your eventual sale price - and your post-sale satisfaction - start preparing early. Identify weaknesses in your value drivers. Invest in growth, scalability, and systems that don’t rely on you. Build a management team that can run without you, and secure contracted, recurring revenues wherever possible.

And finally, remember that value isn’t just a number on a cheque: it’s about the deal structure, the payment terms, the ongoing legacy, and your future after the sale. The “headline” price is just one part of a complex picture.

Start Now, Not Later

If you take one thing from this article, let it be this: start thinking about value now, not when you’re ready to sell. Whether your exit is five years away or you’re fielding an offer tomorrow, the sooner you understand what your business is really worth - and what you need it to be worth - the more options and control you’ll have.

You only get to sell your business once. Make sure you do it on your terms, with your eyes wide open.

Chris Spratling is the founder of Chalkhill Blue Limited, a leading business coaching and consulting practice that specialises in helping business owners to scale their companies’ operations and achieve successful exits. With over 30 years in business Spratling has been an entrepreneur, a strategic mergers and acquisitions professional, and a trusted business coach who has owned, bought, and sold multiple seven-figure businesses himself.

His recently launched book The Exit Roadmap equips readers with the essential knowledge needed to avoid costly mistakes and sell their business profitably. From vital strategies to drive business value and increase a company’s attractiveness, to the secrets to a smooth transition, no part of the sale process is overlooked.