What Is My Business Actually Worth?

By Ed Weeks Jr., MBA, CM&AA, Weeks Consulting Group

Last updated: October 26, 2026

Your business is worth what a buyer can see and what that buyer can finance. Anything else is a number on a listing. A buyer sees your bank statements, your books, your tax returns and the people who run the place. A lender then asks whether the earnings behind those papers can carry the debt. Where those two checks agree, you have a real price. Where they don’t, the price moves, and it usually moves after you have already said yes to a number.

On a call with a lender this week, I explained how I position this with every owner from the very beginning. I’m not going to blow smoke at an owner and tell them they are valued at a certain level. At the end of the day, your only value is what a buyer sees and what they can finance. Then I do my best to make sure that owner gets the maximum value they deserve. Those two sentences go together, and the rest of this post is how you get there.

What does “worth” mean when someone has to finance the purchase?

Most buyers of companies your size use debt. Individual buyers often use an SBA loan. Private equity buyers use senior lenders. Either way, the lender’s question is the same: can this company’s past earnings cover the debt placed on it?

Under the SBA’s current lender rules for an initial acquisition, the lender must see debt service coverage of 1.25 times, measured on your last fiscal year or the average of your last two. The lender generally cannot rely on the buyer’s projections to meet that test. In plain terms, your history sets the ceiling on what a buyer can borrow to pay you. I walk through the details in Paper Before Price.

That is why two owners with a similar story can walk away with very different outcomes. One can show a lender the paper. The other has a good story and a shoebox.

Why is the number I was given different from what buyers are saying?

Because a number is easy to give and hard to defend. I’ll say this plainly: people are getting crazy astronomical numbers because some brokers put them out there just to get the listings. When the buyer’s lender gets to the paper, that number has nowhere to stand.

Plenty of brokers do right by their owners every day. But too many marketed deals show up with unreliable financials, an owner who is not prepared, and a price that has nothing to do with how the company performs. An honest valuation starts from what you can prove.

How do I defend my number before a buyer tests it?

Get your own paper done first. I have been having owners get a quality of earnings review from their side. It is not there to satisfy a lender. It is there to support what the value is. A CPA does the work, not me, and yes, it costs money. But once it is in place, we can defend the price a lot easier.

I have leaned on the seller-side quality of earnings more than ever lately, and the reason is simple. When the buyer sits down across from you, you can walk through numbers that already tie out instead of defending a number somebody made up.

What do roll-ups do to the price I see?

There is a lot of roll-up activity right now in HVAC, home services and roofing. Companies are being bought and stacked into something bigger, and the headline numbers get a lot of attention. I’ll tell you what I think about it: at some point, the money ends. A couple of roll-ups have already failed.

When a roll-up fails, the owner can get the place back for nothing. He is done, he can’t do it anymore, and he just wants to sell whatever he has left for whatever he can get. I have also been on the wrong end of a roll-up that collapsed because the capital behind it was not there. So before you accept a high number from a roll-up, ask where the cash comes from. A price that depends on a buyer’s backers is only worth what those backers can fund. The same goes for any part of your price that is deferred, like a seller note or an earnout.

What if my business looks ugly right now?

Then you are not out of the game. A business that is kind of ugly right now and needs a little dress up before it gets there can be a perfect fit for the right buyer. Even a business running thin margins can still be worked with. Most of the time the owner just does not know what is going wrong operationally, and operations can be fixed.

Give yourself 3 to 6 months before you go to market. Use that time to clean up the books, tie the numbers out and get your people and processes in order. It is far better to do that work on your own schedule than on a buyer’s.

Who am I really selling for?

I’m 56, and most of the owners I talk to are my age or older. Most of them have spent decades building the business. This is their one chance, their position for life, and that is a huge responsibility. They care about that one event that sets them up. They also care about the 25 people who work for them and the families behind those people.

That is why I tell owners the reality from day one. A fluffy number feels good for a few weeks. A real number protects your family, and it protects the people who count on you.

What should I do first?

Here is where I would start. None of this commits you to a sale.

Tie out your paper. Bank statements, books and tax returns for the last two fiscal years and the trailing twelve months should agree with each other. If they don’t, find out why before a buyer does.

Ask your CPA about a seller-side quality of earnings. It tests whether your earnings are real, whether they repeat and whether the cash backs them up.

Ask what a lender would see. Find out what your last fiscal year says about the debt a buyer could carry. That is the ceiling your price has to live under.

Question every number you have been handed. Ask where it came from, what it is based on and who has financed a deal like it.

Fix what looks ugly. Take 3 to 6 months to clean it up. If you want the longer view on how multiples work, I cover it in How Much Is My Business Worth Before I Sell?

Check the money behind any buyer. Especially a roll-up. A high price from a buyer who cannot fund it is not a high price.

Where do I start?

Start with one question: if a lender looked at my last fiscal year, what would they see? Write down the answer, then write down what you would change in 3 to 6 months. That one page tells you a lot about how a buyer will see your business. It is also where a lot of my work with owners at Weeks Consulting Group begins, whether they are getting ready to sell, looking to buy, or just want options.

If you want a quick read on where your business stands today, take the Business Optionality Assessment. It takes about 3 minutes: https://edweeksjr.com/assessment/

About the author

Ed Weeks Jr., MBA, CM&AA, Weeks Consulting Group. Ed advises owners of $2M to $20M businesses on growth, financing, M&A and exits.

General education, not legal, tax or investment advice.