Frequently Asked Questions About Business Valuation (Part 2)

This is part two of our business valuation FAQ series. Missed part one? Click here!

What if my business is "too small" for a formal valuation?

There's no such thing as too small. If your business generates consistent profit and you're making decisions about its future, you benefit from understanding its value. That said, your investment in formal valuation should match your situation. A business doing $500K in revenue has different needs than one doing $5M.

We've designed our Intelligent Valuation Report to serve the middle market. This includes businesses with $1M to $50M in revenue where professional documentation makes a material difference in financing, transitions, and eventual exits. If your business is smaller, the Three Days to a Smarter Valuation course alone might give you the framework to estimate value yourself. If you're larger or have complex structures (multiple entities, real estate holdings, intellectual property), we can scale the analysis appropriately.

Can I do my own valuation using online calculators?

You can certainly estimate value using industry multiples and basic calculators. Many business owners do this as a starting point. The limitation is credibility. When you're sitting across from a banker, a buyer, or potential partners, "I used an online calculator" doesn't carry very much weight.

Professional valuation provides:

●       Verified financial analysis (not self-reported numbers)

●       Normalized adjustments documented and explained

●       Market data from proprietary databases of actual transactions

●       Methodology that follows accepted business valuation standards

●       A documented report that third parties can rely on

Think of it this way: you can estimate your home's value using Zillow, but when you're actually selling or refinancing, you need a professional appraisal. This same principle applies to your business, which is arguably a much more complex and valuable asset.

What information will you need from me?

The foundation of any solid valuation is complete financial information. Here's what we'll need:

Required:

●       Last 3 years of business tax returns (complete, including all schedules)

●       Current year-to-date profit and loss statement

●       Current balance sheet

●       List of owners and ownership percentages

●       Brief business description and history

Helpful for accuracy:

●       Customer concentration (top 10 customers as % of revenue)

●       Revenue by product/service line or division

●       Organizational chart showing key management

●       List of significant equipment or assets

●       Current accounts receivable aging

●       Any contingent liabilities or pending legal matters

●       Explanation of any unusual revenue or expense items

The more context you provide, the more accurate and defensible the valuation becomes. This is why Day 3 of our course focuses on preparation and helping you understand what information matters and why.

How do you handle confidential information?

Strict confidentiality is fundamental to our practice. Every valuation engagement includes:

●       Non-disclosure agreements before any information is shared

●       Secure document transfer systems (never email attachments)

●       Limited access: only the professionals working on your valuation see your data

●       No information shared with third parties without your explicit written consent

●       Reports delivered securely and marked confidential

Your financial information, customer lists, operational details, and business strategies remain completely private. The valuation report itself is your property. You control who sees it and how it's used. Many owners maintain confidential valuations for years, using them internally for planning without ever sharing them externally.

What makes the Intelligent Valuation Report different?

Three things set our approach apart:

1. Market-Based Reality We don't use theoretical models or academic formulas divorced from real transactions. Our valuation draws on proprietary databases of actual business sales and includes what buyers really paid, not what textbooks say they should pay.

2. Bank-Ready Documentation Our reports are structured the way lenders and buyers expect to see them, and they include normalized EBITDA or SDE, three-year trend analysis, market multiple ranges, and clear explanation of adjustments. No translation needed.

3. Actionable Insights Beyond the number, you get clarity on what drives value in your business and what reduces it. You can see where operational changes would have the most impact on transferable value.

We've worked with hundreds of business owners through sales, financing, and succession planning. Our valuation process is built on what actually matters in those real-world situations.

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Part 3 is coming soon! Keep your eyes open for more content!