What is my business worth to a buyer?
Short Answer
A buyer applies a multiple to your normalised earnings and sets that multiple on the quality of your intangible assets — brand, customers, technology, processes and people — not on last year's profit alone.
Full Explanation
Your business is worth what a buyer will pay, and buyers price on a multiple of sustainable earnings rather than on a single year's profit. They start from normalised EBITDA — your earnings adjusted to remove one-off items and owner-specific costs — and apply a multiple. The size of that multiple is where most of the value sits, and it is set by the quality of what sits beneath the earnings: how contracted and diversified your revenue is, how dependent the business is on you, whether you own your technology and intellectual property, and how strong your brand and processes are. These are intangible assets, and most of them never appear on your balance sheet, which is why owners are often told their business is worth less than it is. The practical implication is that you influence your own valuation by evidencing these drivers before you sell. See [business sale valuation](/insights/what-is-my-business-worth-to-a-buyer) for how the multiple is set, and [see Opagio Intangibles in action](/opagio-intangibles) to value the intangible assets a buyer will pay for.
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