How Much Can I Sell My Business For? Five Factors That Decide Your Price
If you’re a business owner and are considering an exit, you’ve likely come across the question: how much can I sell my business for? It’s a question with big implications for your financial future, yet the answer is rarely as straightforward as you’d think.
The key is to not rely on rules of thumb as it can often miss the true drivers of value. In our experience in preparing valuations for companies across industries, owners who take the time to get a valuation done by certified professionals often see far better results. We’ve seen that businesses which go to market with a BizWorth valuation typically receive offers of 90% or more of their appraised value, while those selling without a professional valuation average only about 70% of their true worth.
So how do we figure out the actual price of your business? Below are eight key factors that can affect your business worth and shape the final number that buyers are willing to pay.
1. Financial Performance and Earnings Quality
All of the key factors ultimately boil down to your financial performance and earnings quality. The factors we’ll discuss later can drastically affect how the financial performance is displayed, but overall, this is the number one thing buyers focus on. They will want to examine your earnings trends closely. Rising revenue and healthy profit margins are clear signs of a strong business.
For example, in one architectural firm valuation we performed, the company’s revenue jumped significantly in a single year. That growth trajectory, paired with improved margins, significantly boosted its valuation.
When asking. “How much can I sell my business for?” the answer almost always starts with clean financials that show normalized earnings. Profits are also adjusted to remove any one-time costs or owner-specific expenses.
2. Industry and Market Trends
Your business doesn’t exist in a vacuum. Various factors such as market demand, economic cycles, and industry forecasts all influence its value. In our valuations, we analyze economic data and industry benchmarks to reflect the real-world conditions in place when the valuation was prepared.
For instance, a business aligned with growing demand typically sees a higher valuation. This is why one of the most important factors affecting business worth is how your industry is currently trending. Like the other factors we’ll discuss, these all tie back to your financial performance.
3. Customer Base and Retention
Recurring revenue and loyal clients drive value. A business with a diversified customer base reduces risk, while overreliance on one or two accounts can negatively impact the valuation due to perceived higher risk.
Businesses with steady contracts across multiple clients achieve stronger valuations compared to firms dependent on just a handful of relationships. When asking, “How should I price my business?”, start by assessing how secure and diverse your customer base really is.
4. Assets and Liabilities
When creating a valuation, physical assets are an important consideration that can strengthen the result. These assets include real estate, machinery, vehicles, and other tangible property. On the flip side, debt and liabilities pull in the opposite direction and can decrease value.
In one BizWorth-certified report, the company’s low debt-to-equity ratio helped boost a prospective partner’s confidence. Having a clean balance sheet not only improves value but can also make transactions smoother.
5. Growth Potential
Future opportunities don’t automatically increase a company’s fair market value, but they can influence how buyers perceive the business within a reasonable valuation range. When growth opportunities are clearly articulated and supported by data, they can validate industry growth expectations and justify a price toward the higher end of comparable transactions.
For example, if a company operates in an expanding market and can demonstrate realistic plans for new service lines, geographic expansion, or efficiency gains, buyers may view those as reinforcing industry forecasts rather than speculative upside. In this way, potential growth helps support a premium within fair market value parameters, without overstating what the business is worth today.
When preparing for a sale, business owners should focus on communicating these opportunities clearly and credibly. A professional valuation can help translate those plans into context, ensuring that both historical performance and future prospects are presented in a balanced, defensible way.
Why a Professional Valuation Matters
While the above factors shape the answer to “How much can I sell my business for?”, pulling them together into a defensible number requires expertise. A valuation conducted by certified professionals applies the income, market, and asset approaches to capture both tangible and intangible drivers of value.
Our reports don’t just provide a number, they give owners like you confidence. As noted earlier, businesses that go to market with a BizWorth valuations typically sell for 90% or more of their appraised value, while those selling without a valuation often walkaway with just 70% of their true worth. That gap can represent hundreds of thousands, or even millions of dollars left on the table.
Get the Right Answer Before You Sell
If you’ve ever asked yourself, “How much can I sell my business for?”, the real answer is: it depends. The key factors mentioned above all play a role, in addition to obtaining a professional valuation. Buyers will want to see your financials, market position, customer base, and growth potential, but only a certified appraiser can bring all of these together into a clear, credible number.
At BizWorth, our certified appraisers have valued companies across industries, giving owners like you the clarity needed to sell with confidence. By getting a valuation before you sell, you not only understand your business’s worth, you also maximize the likelihood of achieving it in the marketplace.
