The Number Most Owners Never Ask For
Updated: 3 days ago
The Blind Spot That Could Cost You Everything
Here is an uncomfortable truth: every business owner will exit their business. Not might. Will. Through a sale, a transition to family or key employees, a merger, disability, divorce, or death, one hundred percent of owners leave eventually, on someone’s timeline. Yet most owners have never had their business formally valued and have no documented plan for that day. That gap, between what will inevitably happen and what an owner has actually prepared for, is where fortunes are quietly lost. Not because owners are not smart or capable, but because ‘exit’ still feels like a someday problem, right up until someday arrives without warning.
Why “I’ll Deal With It Later” Is the Costliest Assumption You Can Make
For most owners, the business is the single largest asset on their personal balance sheet, larger than the house, the retirement account, and every other investment combined. Yet it is usually the asset they understand least in hard dollar terms. According to the Exit Planning Institute, only 20 to 30 percent of businesses that go to market ever actually sell, often because the owner’s expectation of value and the market’s read on that value are worlds apart, and the gap surfaces too late to close. Layer on the fact that roughly half of American businesses are owned by Baby Boomers who will transition ownership within the next decade, and you have a slow-moving crisis hiding in plain sight: owners staking their retirement on a number they have never actually confirmed.
Two Very Different Ways to Learn Your Business’s Worth
Owners often assume there is one path to “knowing the number,” and that it is expensive and only relevant the day they decide to sell. Neither is true. On one end sits the fully certified valuation report: a formal, credentialed engagement built to withstand a judge, the IRS, or a shareholder dispute. It is thorough, it is defensible, and it is priced accordingly. It is also not what most owners need on a random Tuesday, three, five, or eight years before they plan to leave.
That is where a calculation of value comes in, and it is something I offer as its own standalone engagement, entirely separate from a comprehensive exit plan. Working largely from an owner’s tax returns, I run the business through a data platform that benchmarks it against thousands of businesses in the same industry code, adjusted for size, profitability, customer concentration, and owner dependence. The result is a credible, defensible range that in my experience tracks within about 10 percent of what a full certified valuation later confirms. It is a checkup, not a diagnosis reserved for when something is already wrong.
The Real Payoff: Deciding Whether to Grow or Go
Once an owner has a credible number in hand, the conversation changes entirely. Instead of guessing, we can ask the questions that actually matter: Is this value close to what you need for the retirement you want, or is there a real gap? Which parts of the business – customer concentration, a thin management bench, inconsistent financials – are quietly discounting what a buyer or successor would pay? Is this the year to double down and build value, or the year to start building a formal exit plan?
That is the heart of value acceleration: using today’s number as a baseline, then working deliberately to close the gap between where the business stands and where it needs to be, whether that takes two years or ten. A calculation of value does not replace a comprehensive exit plan. It is what makes an exit plan worth building, because you finally know what you are planning around.
Where to Start
If you have never had your business’s value calculated, or it has been more than a year or two since you did, that is the first conversation worth having, long before any decision to grow, sell, or transition. Reach out and I will send you a simple one-page comparison of the three ways a business gets valued today, what each one costs, how long it takes, and when each one actually applies. From there, we can talk about whether a calculation of value makes sense as your starting point.
Knowing your number does not commit you to anything. Not knowing it commits you to guessing with your family’s financial future. Let’s fix that.
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