FYI, that MP3 is a mock-up of my voice. Beehive automatically creates one that you can listen to… it's kinda weird but kinda cool at the same time. I think I am more animated than that, but oh well 🤣
TL;DR – Part 1: Most business owners want to know what their company is worth—but fear that asking will trigger a feeding frenzy of advisors, brokers, and buyers trying to steer the outcome. This article reframes business valuation as a lens, not a number, helping owners see their company through three distinct perspectives:
Owner’s Utility Value — What the business is worth to you, based on time, income, and wealth.
Market Valuation — What it’s worth to a financially motivated buyer, based on normalized cash flow and risk.
Strategic Transaction Value — What it’s worth in a real deal, to a specific buyer, under real terms.
Together, these lenses give you the clarity to lead like an investor—aligning your business with your life, your strategy, and your future (whether you sell or not).
📚 Estimated Read Time: 7–9 minutes
Table of Contents
1. Why Mastering Your Understanding of Business Valuations Matters (Even If You’re Not Selling)
“I want to know what my company is worth in the market… but I don’t want to sell.”
Most owners I know are deeply curious about what their company is worth, but don’t want to ask the question out loud.
Because the moment you float it, "What’s my business worth?" it’s like blood in the water.
Suddenly, the professionals swarm.
The consultant, now rebranded as an “Exit Planner,” can’t wait to get involved.
The wealth manager is salivating at your liquidity event.
The private equity guys tell you you’re amazing, right before submitting a lowball LOI.
The banker wants to lend against your future proceeds.
The broker or investment banker dangles stories of dream exits.
The attorney drafts a term sheet before you’ve even decided what you want.
And somewhere in that flood of noise, you—the owner—realize you’re not in control of the conversation anymore.
You asked a simple question.
And now the deal train is leaving the station…
…and you’re not even sure you want to be on it.
The Real Problem
Most owners didn’t go to school for finance.
They built something in the real world — in a specific industry, through hard-earned experience.
We want to know what our business is worth.
We just don’t want to get sold something, or talked into a direction we didn’t choose.
And when we do try to find answers, we hit a wall:
Financial people talk in spreadsheets.
Online articles contradict each other.
Buyers are vague or overly flattering.
Most of the real insights live behind paywalls, pitch decks, or broker relationships.
Even worse? Many of the advisors involved in valuation work don’t understand what it’s like to actually own a company.
They haven’t missed payroll.
They haven’t had a key customer cancel.
They haven’t put their family’s future on the line to fund growth.
They’re managing spreadsheets. You’re managing people, pressure, and tradeoffs.
That’s what makes business valuations so frustrating—
They feel abstract. They feel disconnected.
They don’t reflect the real decisions you’re making, the sacrifices you’ve made, or the value you believe you’ve built.
2. Business Valuation Is a Lens, Not a Number
The Truth: You’re Not Crazy. The System Is.
There’s no common language for business value.
Buyers, bankers, brokers, and owners all look at the same business and see something different.
They use different models. Different tools. Different timelines.
They’re all optimizing for their definition of value.
That’s why two buyers can look at the same company and come back with valuations millions of dollars apart.
It’s not personal. It’s not a trick. It’s perspective.
If you don’t understand those perspectives, you’ll feel like the crazy one.
Most owners think valuation is a single number.
“What’s it worth?”
They expect a clean answer—maybe it’s $2.3 million. Or 5× EBITDA. Or whatever a broker tosses out at an industry event.
But that number, on its own, is meaningless without context.
Because valuation isn’t a number. It’s a lens.
There’s a reason we say, “value is in the eye of the beholder.”
Everyone sees your company through their own filter, based on their goals, constraints, timeline, and use case.
But that doesn’t mean valuation is arbitrary.
Yes, a bottle of water might cost $3 in the city and $3,000 in the desert—but it still has a measurable volume, container, and chemical makeup.
In other words, value is subjective, but not unknowable.
Every functioning market works this way. Real estate, stocks, bonds—they all have observable fundamentals. Buyers and sellers apply their own filters—return expectations, risk tolerance, strategic intent—to determine what something is worth to them.
Privately held businesses are no different.
The real challenge?
There’s no Bloomberg terminal for your company.
No daily ticker. No standardized comps. No real-time signal telling you what it’s worth—or why.
As Brent Beshore says, it’s a messy marketplace.
Valuations are passed around like hearsay—between brokers, buyers, CPAs, and advisors—using wildly different models, assumptions, and incentives.
This article is here to change that.
We’re not chasing a single, “true” valuation.
I’m introducing a clear, simple framework:
Three lenses that help you evaluate your company like an investor, not just an operator.
3. The Three Lenses of Business Valuation (And Why They Matter to You)
Most owners think of business valuation as a single number.
“What’s my company worth?”
But as you now know, that question is layered. There’s no single, universal answer—because value depends on who’s asking, why, and how they define worth.
That’s why we built this framework: Three Lenses of Business Valuation. Each lens gives you a different, essential view of your company, based on your goals, the market’s perspective, and what happens in an actual deal.
Understanding all three is what separates owners who guess from owners who lead.
This is your personal lens.
It’s not about what a buyer would pay. It’s about what the business delivers to you: your time, your income, and your long-term wealth.
This lens forces you to answer questions like:
How involved am I in daily operations?
How much cash do I actually take home?
Could I maintain my income if I sold?
Is this business creating transferable real wealth, or just funding my lifestyle?
By clarifying what the business needs to deliver to you (in time, cash, and equity), you stop chasing arbitrary growth and start aligning your strategy with your life.
Without this lens, it’s easy to fall into one of two traps:
Growth for growth’s sake — reinvesting endlessly, hoping freedom shows up later
The entitlement trap — extracting income now, while starving long-term value
This lens helps you avoid both. It’s your personal ROI benchmark.
This is the objective lens, regardless who the buyer it.
This lens strips away emotion and looks at your company as an asset, regardless of the type of buyer, based on four key drivers that professional buyers use in nearly every deal:
Normalized EBITDA — your business’s sustainable cash flow, after one-time noise
Valuation Multiple — a shorthand for risk: how confident is the market in your future cash flow?
Net Debt — how much debt would need to be paid off to get a clean balance sheet?
Normalized Working Capital — the cash tied up in operations to keep the machine running
Together, these create the formula:
EBITDA × Multiple = Enterprise Value – Net Debt – Working Capital Adjustment = Equity Value
This lens gives you clarity on what your business is likely worth today, in a fair-market transaction with a financially motivated buyer.
Whether or not you ever sell, you should know this number.
Why?
Because it lets you:
Benchmark your value in the market, regardless of the buyer
Spot gaps between perceived and actual value
Measure ROI on strategic decisions
Creates confidence when you have to make important decisions
It’s the investor’s lens. Every serious capital allocator knows this formula. You should too.
This is the situational lens.
It’s not a generic market formula, it’s what a specific buyer might pay in a specific deal, based on:
Their ownership structure (e.g., private equity, strategic buyer, ESOP, family office, etc.)
Their investment goals and return expectations
Their strategic reason for the acquisition
The actual deal terms (cash at close, seller notes, earnouts, taxes, fees, etc.)
This lens reveals the real-world outcome of a transaction—including:
How much cash you actually take home (net of taxes and fees)
What role you’ll play post-sale (if any)
What happens to your team, brand, and legacy
Whether the structure aligns with your values and goals
Without this lens, owners often get surprised at closing—or worse, regret a deal that didn’t get them what they really wanted.
This is where everything comes together: your goals, the market’s view, and the buyer’s structure.
Why the Three Lenses Matter (Even If You’re Not Selling)
You don’t need to be selling your company to care about your company’s valuation.
You need to understand the three lenses of business valuation for clarity—to make better decisions—right now.
When you learn to see through all three lenses, you:
Make strategic, not emotional, choices
Allocate time and capital intentionally
Reinvest with confidence—or distribute with clarity
Know what you’re building toward—and when it’s “enough”
Stop feeling reactive, and start operating like an investor
Most importantly, you stop being at the mercy of advisors, buyers, brokers, or spreadsheets.
You take control of your time, cash flow, and wealth.
That’s what this whole series is about.
Not getting ready for a sale—but building a business that works for you, and that holds real, growing value—whether you keep it, scale it, or sell it one day on your terms.
