The method
How we value a business.
The Read gives you a range for what the business is worth, and shows the three factors that drive where you fall in that range.
An example. Your own result will differ.
A buyer would pay between $3.7 million and $7.7 million. The market pays about $5.7 million for a business like this. This example sits at $4.9 million.
Where the example lands today: $4.9M.
Here are the three factors for this example, and what each one adds or takes away. Tap one to see the number change.
- Profitability.Holding.+0.3x
Your true earnings: the money that actually reaches the bottom line.
- Predictability.Soft.-0.2x
How sure next year’s money is. Repeat and contracted work counts more than one-off jobs.
- Transferability.Weak.-0.7x
Whether your people, the contracts, and the customers stay put when you step back. Buyers often test this first, and it is the hardest to fix quickly.
Improve any of the three, and where you land in the range moves up.
An illustrative example, not a valuation or financial advice.
Why a range, not a number.
Buyers do not price a business at a single number. They price it within a range. We set your range from what buyers pay for businesses your size, adjusted for your industry. Where you land inside that range is not luck. Three factors drive it, and you can improve all three.
Who can buy you.
A few things set who can buy you, and at what price: your books and whether your contracts transfer. We check those too.