What Buyers Look for When Valuing Your Business

By Dave Godwin, CBI

Each man touches a different part.

One grabs the tusk and says,“An elephant is sharp and rigid.”

Another holds the leg and says,“No, it’s solid and strong like a tree.”

Another feels the tail and says,“You’re both wrong—it’s thin and rope-like.”

All of them were sincere.

All of them were partially right.

And every one of them missed the full picture.

I see this same thing play out with business owners every week.

When an owner starts thinking about selling, they often judge the value of their business based on the one piece they know best:

·Revenue growth

·Customer relationships

·Equipment and assets

·Future market potential

·What an industry publication says that they may be worth

·Getting a valuation from someone who tells them what they want to hear

That perspective makes sense—it’s the part they’ve been experiencing for years.

But buyers don’t value businesses from one angle.

They look at the whole elephant:

·Cash flow quality

·Transferability

·Customer concentration

·Management depth

·Risk

·Growth opportunities

·And yes—your story, not just your numbers

When owners rely on a single viewpoint, they either:

Overestimate valueand miss real buyers, orundervaluethe business and leave money on the table

Neither outcome is accidental. Both come from incomplete information.

Selling a business isn’t about being right fromyourvantage point.

It’s about understanding how the entire animal looks to the market.

The most successful exits I’ve been part of all share one thing in common:

The owner stepped back, widened the lens, and let others help them see what they couldn’t feel on their own.

If you’re considering a sale—this year or someday down the road—the first step isn’t listing.

It’s perspective.

Because when you finally see the whole elephant, the path forward gets a whole lot clearer.

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