# What Is My Business Worth? How Buyers Value It (2026) Canonical: https://withhorizon.co/articles/what-is-my-business-worth [← All articles](/articles) October 2026·10 min read SellingBuilding value # What is my business worth? How buyers value it How buyers value a private company, the multiples they paid in 2025 and 2026, the add-backs they accept, and what you actually keep. Matt HarrisonCo-founder and President, Horizon In this article[How buyers value a business](#method)[What multiple you'll get](#multiple)[Why buyers differ](#buyers)[What you keep](#take-home)[Online calculators](#calculators)[Raise it](#raise-it)[FAQ](#faq)[Find out yours](#find-out) For Owners OnlyEvery article, plus one move worth real money, every Thursday. By subscribing, you agree to get For Owners Only emails from Horizon. Unsubscribe anytime. [Privacy Policy](/privacy-policy) You’re in. See you Thursday. Share ## The short answer A buyer values your business as the profit they believe will continue after you leave, times a multiple. The profit is usually adjusted EBITDA for the last 12 months: profit before interest, taxes, depreciation and amortization, adjusted for costs a new owner wouldn't carry or would have to add. The multiple is how many years of that profit the buyer values the business at. Private equity deals of $1M to $25M (deal size, not revenue) averaged about 5.5x to 6.7x in the first half of 2025 (GF Data). What you keep comes after debt, deal terms and tax. And you only truly know what it's worth once all of it is in your account. **In this article:** [How buyers value a business](#method) · [What multiple you'll get](#multiple) · [Why buyers differ](#buyers) · [What you keep](#take-home) · [Online calculators](#calculators) · [Raise it](#raise-it) · [Find out yours](#find-out) ## How do buyers value a business? Most buyers of a profitable private company multiply adjusted EBITDA by a multiple. The answer is enterprise value: the price for the operating business, assuming it's handed over with no debt, no spare cash and a normal level of working capital. Here's the whole calculation on one page. How a buyer gets to a price Example Reported EBITDA $2.0M Adjustments a buyer accepts, for costs a new owner wouldn't carry plus $0.3M Adjusted EBITDA: the profit a buyer believes $2.3M Times a multiple of 6x to 7x, depending on risk Enterprise value $13.8M to $16.1M Illustrative only. The multiple depends on size, industry and risk. EBITDA is earnings before interest, taxes, depreciation and amortization. It's a rough stand-in for operating cash, and it overstates cash in businesses that must keep buying equipment or machinery. Adjustments go both ways. Your personal, non-business costs come out. But if you pay yourself mostly in dividends or distributions, a buyer deducts a market salary for the person who replaces you, which lowers adjusted EBITDA. The adjustments are where owners and buyers most often disagree. A buyer will test each one, often with a quality of earnings (QoE) review by an accounting firm they hire, which also checks your revenue, your working capital and anything that behaves like debt. Every dollar of adjustments they reject comes off the price, times the multiple. At 6x, $100,000 is worth $600,000. Notice what one turn of multiple, one more year of profit, is worth. On $2.3M of profit, the gap between 6x and 7x is $2.3M. That's why buyers spend so much time on the risks that set the multiple, and why you should too. Behind this sit other methods: discounted cash flow, comparable company and precedent transaction analysis, and asset-based approaches. But when a profitable company your size gets an offer, it almost always comes down to a multiple of EBITDA. Fast-growing businesses that aren't yet profitable, and some sectors like software, may be priced on a multiple of revenue. ## What multiple will my business sell for? In GF Data's private equity deals of $1M to $25M, companies sold for about 5.5x to 6.7x adjusted EBITDA on average in the first half of 2025, and larger deals for about 7.1x in 2026. Individual deals land well above and below those averages. Where you land depends on size first, then industry, then the risks specific to your company. These are multiples of adjusted EBITDA. Smaller owner-run businesses, usually well below $1M in EBITDA, are often priced on seller's discretionary earnings (SDE) instead, a different measure with lower-looking multiples (see the FAQ). Size matters because bigger companies are less likely to hinge on one person or one customer, more buyers can bid for them, and lenders will finance more of the price. Deal size (enterprise value, not revenue) Average multiple Period $1M to $5M About 5.5x First half of 2025 $5M to $10M About 5.6x First half of 2025 $10M to $25M About 6.2x to 6.7x First half of 2025 $10M to $500M, all deals 7.1x First half of 2026 Source: GF Data, private equity deals. The newest public figures by deal size are from 2025; the 2026 figure covers larger deals. Industry moves it too. In the first half of 2026, GF Data's deals of $10M and up averaged 7.7x in healthcare services, 7.5x in business services, 7.1x in manufacturing and 6.0x in distribution. Smaller deals usually sit below those. Then a buyer prices your company's own risks. Pulls the multiple down Pushes it up Customers and decisions that run through you A team that runs it without you One customer with a large share of revenue Revenue spread across many customers Project or one-off revenue Contracts and repeat revenue Flat or falling results Growth and margins above 10% Books that need explaining Monthly numbers a buyer can check Buyers pay for quality, though the premium has narrowed lately. GF Data tracks companies with revenue growth and margins both above 10%. Over its history, they have sold for about 15% more than other companies on average. In the first half of 2026, the premium was about 5%. These figures come from completed private equity deals, which lean toward healthier companies. Use them as reference points, not a price for yours. Where your business sits on the risks above is what moves you within the range, and it's what a [Value Baseline](/value-baseline) scores. ## Why would one buyer pay more than another? Because your business is worth more inside some plans than others. A competitor that can cut overlapping costs, or sell more to your customers, may pay more for the same profit than a buyer pricing you on your numbers alone. It may also be that your product, technology, or intellectual property fills a gap for them, and buying it is cheaper and/or faster than building it. A buyer already in your space, whether a competitor or a private equity firm adding to a company it owns, can often pay more than one entering it for the first time, because your business is worth more inside theirs. How much of that extra value reaches you depends on competition. You only find out what the highest number is when more than one buyer looks at the same time, usually through a competitive sale process. **How a platform buyer thinks.** A lot of the value in these deals is made on the buyer's side of the table. Let's say a private equity firm owns a company with $10M of profit, valued at 8x. It buys your business, with $1M of profit, at 6x: $6M. That's more than a first-time buyer might pay, and it still works for them. When they later sell the combined company at their multiple, your $1M of profit could be worth $8M. Dealmakers call that gap multiple arbitrage. It's why the buyer's multiple, not yours, decides what your profit is worth to them, and why a second bidder matters: it decides how much of that gap you keep. Illustrative numbers. **Ready to run a sale process?** We'll introduce you to two or three M&A advisors who sell companies your size, usually within a week. It's free to you, with no obligation; the M&A firm pays us. [Find my advisor →](/exit-now#firm) ## How much of the price will I keep? Less than the headline. Enterprise value is the price for the whole business. What reaches your account comes after debt, cash and deal terms. Most deals at this size are priced cash-free and debt-free. You keep cash above a normal operating level, and the price comes down for debt and for items the purchase agreement treats like debt, such as unpaid taxes, accrued bonuses and customer deposits. The price then moves up or down by how far working capital at closing sits from a negotiated target, called the peg, usually based on a 12-month average adjusted for seasonality. Working capital is mainly receivables and inventory, minus payables and accruals. After that come a holdback or escrow (money set aside for claims after closing), any part paid later, like an earnout that pays only if targets are met, fees and tax. Whether you sell shares or assets, and how much you roll into the buyer's company or lend back to them, can substantially impact what you keep. **What I've seen.** Owners who leave tax planning until there's an offer. Depending on where you live, how your company is set up and other factors, some tax planning takes years before you get its full benefit, so it has to start long before a sale, even if one isn't on your radar. Before starting Horizon, I watched several owners find this out at the deal table, and it cost them millions. ## Are online calculators or professional valuations a good guide to price? A calculator can't rebuild your profit, price your risks, and see the potential in your company. Rules of thumb like "one times revenue" have the same problem: two companies with $10M of revenue and different margins can have very different values. At best they give you a rough range. A professional valuation, by a chartered business valuator or an accredited appraiser, gets closer. It isn't wrong: it answers a different question. It estimates fair market value for a hypothetical buyer, so it leaves out what a specific buyer could do with your company, and what competition between buyers adds. I've seen clients sell for twice a professional valuation done a year earlier. And a valuation is not an offer. An offer is one buyer's number, with conditions, paid partly at closing and sometimes partly later. Deal terms can move what you take home as much as the price, and they get the least attention. ## How can I increase what my business is worth? Work on the risks that pull the multiple down, and the profit a buyer can prove. Some of it is fast: documenting add-backs takes a few months. Most of it isn't: handing off decisions, spreading revenue across more customers and moving work onto contracts usually take one to three years to show in the numbers. None of it is wasted if you never sell. A business that runs without you, on numbers you can trust, is easier to own today. The hard part is knowing which of those levers matters most in your business, and in what order. ## Frequently asked questions Smaller owner-run businesses sold through brokers are usually priced on seller's discretionary earnings (SDE): EBITDA plus one owner's full pay and perks. Once there's a management team and a private equity or industry buyer, adjusted EBITDA is the standard. Never compare an SDE multiple with an EBITDA one. The method is the same. In my experience, Canadian deals often price a little lower, partly because there are fewer buyers and lenders, though little public data measures the gap. The bigger difference is tax and deal structure, so plan both early. They answer different questions. A tax or estate valuation estimates fair market value for a hypothetical buyer, often with discounts, and leaves out what a specific buyer could do with your company. A buyer prices the profit they can verify, their own plan and their own risk. Depending on the buyer, the offer can come in higher or lower. There's no reliable published figure. It shows up as a lower multiple, more of the price paid later through an earnout, or both, and at the extreme some buyers walk away. It starts at $20,000 per company, with one owner included. Additional owners are quoted on your first call, which is free, confidential and 30 minutes. Yes. What raises your number, like profit you can prove and a business that runs without you, makes the company easier to own today and keeps every option open. ## How do I find out what my business is worth? Get it valued the way a buyer would, before a buyer does. That's what a Value Baseline is, and it works the same whether you plan to sell, grow or hand the business to family. We go through it with you: 1. **A fit call.** A free, confidential 30 minutes with a co-founder: what companies like yours sell for, and where yours is likely to land. 2. **One data request.** The same things a buyer would ask for, so your team pulls them once: three years of statements and tax returns, revenue by customer, owner pay, contracts and the org chart. 3. **A Value Day.** One day of your time. We look at your numbers, team, customers and systems, and interview you in depth. 4. **The analysis.** Over the next few weeks we restate your profit the way a buyer's accountants would and score the business on more than 160 value markers, from owner dependence to customer concentration and recurring revenue. We value it on real sold deals in your industry, benchmark it against peers, and test it with a live buyer or M&A advisor, fully anonymously: no company name and no owner name. 5. **Your results.** Within four weeks: what it's worth today and the range around it, the three moves that would raise it most, in order, and our straight call on whether to sell now or hold and let it grow. Find out your number before a buyer tells you theirs. If a buyer calls next month, you'll know whether their number is fair. If nobody calls, you'll know what to build, and what it's worth to build it. [Start with a free fit call →](/value-baseline) _General education for owners, not legal, tax or investment advice._ ## Sources - GF Data (2025). "Small-Deal Resilience: Why the Under $25 Million Tier Still Moves in H1 2025", November 11, 2025: 118 private equity deals of $1M to $25M, average multiples by size. - GF Data, via ACG Middle Market Growth (October 1, 2026), "Middle-Market M&A Regains Its Footing as Growth Takes Priority": 170 deals of $10M to $500M in the first half of 2026; 7.1x average; sector averages; above-average performer premium. - Matt Harrison's deal experience: multiple arbitrage on the buyer's side (story bank entry 23), illustrative numbers. - Definitions: Horizon Answers and Glossary. Matt HarrisonCo-founder and President, HorizonHe has advised owners of 7 to 9 figure companies on more than $100M in deals, from the first valuation to the day the money lands.[Connect with Matt on LinkedIn](https://www.linkedin.com/in/matthewrobertharrison/)[More about Matt →](/team) Last updated October 2026 · Next review April 2027 ## Get the next answer first. 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