He went silent for close to a minute.
Not five seconds. A full, uncomfortable minute, staring at the screen between us.
I’ve sat across from hundreds of owners during a valuation conversation. You learn to read the silences. This one wasn’t disappointment. It wasn’t shock in the usual direction.
The number was more than double what he thought his business was worth.
The group everyone writes about
Most valuation content targets the same owner: the one who thinks his business is worth 12x EBIT because someone in a Facebook group said so.
That owner is real. I meet him all the time.
He anchors on hearsay. He compares his $3M services business to a $50M SaaS exit he read about. He treats a cold email from a private equity associate as proof that buyers are lined up. He walks into the conversation defending a number he’s never stress-tested.
When the real data arrives, he fights it.
The multiple is wrong. The comps don’t apply. The adjustments aren’t fair. The buyer doesn’t understand his business.
Every piece of preparation feels like an attack on the number he’s attached to. So he doesn’t prepare. And the outcome matches.
The group almost nobody talks about
There’s a smaller group, quieter and rarer.
These are the owners who think their business is worth less than it is.
Sometimes significantly less.
They’re usually heads-down operators. They’ve built something real over fifteen or twenty years. They’ve never had a sophisticated conversation about what buyers actually pay for. They assume their business is “too boutique,” “too dependent on me,” “too small to matter.”
They haven’t heard from anyone credible that the market might disagree.
So they walk in braced for disappointment. Apologetic, almost. Hoping the number won’t be embarrassing.
The client I mentioned above was one of them.
Specialty B2B services firm. Around $4M in revenue. $1.1M in adjusted EBITDA once we rebuilt it properly. He’d been telling himself for years the business was worth “maybe $2M, $2.5M if I was lucky.”
The comp data on similar strategic deals put it at 5.5x. Around $6M.
He went silent. Then he said: “I’ve been underselling this in my own head for ten years.”
Why the underestimators are the best clients
The underestimators get better outcomes than the overvaluers.
They’re not smarter. They’re just not defending anything.
When you show an overvaluer their real number, the conversation becomes a negotiation. They push back on the comps. They relitigate the adjustments. They want to know why their business is different. Every hour they spend defending the fantasy is an hour they don’t spend fixing the real thing.
When you show an underestimator their real number, the conversation becomes a plan.
They absorb it. They ask questions. They get curious about the value drivers. Every improvement feels like upside, not threat. They prepare the financials properly because they have nothing to protect. They work on owner dependence, on concentration risk, on systems, because each one of those moves makes the number bigger and they’re not attached to where it was.
Buyers feel this. Sophisticated buyers can tell the difference between an owner who’s promoting a number and an owner who’s discovered one. The discovered number holds up in due diligence. The promoted one doesn’t.
What to do if you’re guessing
If you’ve never had a proper valuation conversation, you’re guessing. The guess is probably wrong in one direction or the other. Both directions are a problem.
If I were sitting across from you right now, I’d tell you to do three things:
- Get real comp data, not hearsay. What are strategic and financial buyers actually paying right now for businesses that look like yours? Five-year-old deals from a different market don’t apply. Broker pitches are sometimes sales tools, not valuation data.
- Get your EBITDA adjusted properly. Most owners are either under-adjusting (leaving real money on the table) or over-adjusting (creating numbers a buyer will strip out in due diligence). Both versions cost you. Adjusted EBITDA done honestly is the single biggest driver of your valuation number, and almost no owner I meet has done it correctly.
- Get the gap between today’s value and your Number into daylight. Your Number is what you actually need from a sale to make it worth selling. Once you know what the business is worth today and what you need it to be worth, the work becomes obvious. Without those two data points, every decision is a guess.
The truth underneath all of this
The client I opened with is a year into preparation now. The business is getting cleaner. He’s bringing down the dependence on himself. He’s working through the concentration risk. The number is moving in the right direction.
He’s not guessing anymore.
The problem was never that his number was low. The problem was that he didn’t know it.
Whatever your number is, you need to know it. High or low, knowing the real figure is what makes every other decision in your preparation possible. Every month you spend guessing is a month you can’t prepare properly.
The Business Exit Blueprint AI will give you a real diagnostic on where your business actually stands today. You’ll get a grounded view of your value, the drivers that matter most for your situation, and where the biggest gaps are. Whatever the number turns out to be, it’ll be a real one you can work from.
