How Much Is Your Business Worth?

February 22, 2022 by Interchange Capital Partners

By Brian Baum, CEPA®, CFP®

You’ve dedicated years to building and growing your family-owned business—but do you truly know what it’s worth? A clear, data-driven business valuation isn’t just a number on paper; it’s a strategic tool that can shape your financial future, influence key business decisions, and impact your succession or exit strategy.

At Interchange Capital Partners, we work with family-owned businesses to uncover the real value of their companies—not just what they hope it’s worth. As a business consulting firm specializing in ownership transitions and long-term planning, we guide our clients through valuation assessments that align with their business and personal financial goals. Whether you plan to grow, sell, or transfer ownership, understanding your business's worth is the foundation for smart decision-making.

Here’s what every business owner should keep in mind when assessing valuation and planning for the future.

Get a Realistic Valuation

Many business owners believe their company is worth more than it is. You’ve put in all the blood, sweat, and tears to get to where you are, so this is understandable. But it’s important to keep in mind that what you find valuable in your business may not be what is actually valuable to potential buyers. 

At Interchange Capital Partners, our valuation process begins with giving you the real picture of not only what your business is worth today, but also what you need to do in order to maximize value in the future. This is our “Identify and Quantify” step in our process and it can help you achieve your successful transition. The fact of the matter is, for most business owners the value of their business often becomes a major source of their future funding that they will need to cashflow their life. Without a proper understanding of what you have, it’s impossible to plan for the future.

Understand the After-Tax Value

A business valuation can help you understand the after-tax value of your company. The amount you receive in a sale is not necessarily the amount you will take home. Some of the additional costs to consider include:

• Capital gains tax on the profit made from selling the business

• Business broker commission

• Investment Banker's success fees

• Attorney’s fees

• Transfer fees

• Assignment fees

• Transfer taxes

Understanding your final take-home amount, after all taxes and other transaction costs have been paid, is crucial to planning for your future. The sooner you can get a realistic after-tax valuation, the sooner you can make realistic plans for the future or begin to work on potential changes to increase your valuation.

Maximize Your Business Value

The last thing to keep in mind is that maximizing your business value is something to be incorporated into your business every day. Don’t wait until right before you want to sell or transfer the company. Making small improvements can greatly increase the value of your business, and your future lifestyle. Here are some key areas to focus on to maximize your value:

• Management: Your management team should be strong. Buyers want to see that key talent has been retained and developed over time and that company culture is managed well.

• Revenue: Recurring revenue that is stable and likely to continue is a huge plus for future buyers.

• Customer diversification: Just like you want to diversify your investments, your customer base should be diversified too. If all of your company’s business is tied to one customer, it will be significantly less valuable than if you have a broad customer base.

Many buyers want to see that there are solid plans in place, and it’s important to show that your business has a strong purpose and forward momentum that will continue even after you are gone. Remember that focusing on building business value today helps reduce the potential funding gap that could exist when it comes time to monetize your business.

Take Action

Valuing your family-owned business isn’t just about today—it’s about taking steps to strengthen your financial future and preparing for a smooth transition when the time comes. Whether your goal is to transfer ownership to the next generation, sell to an outside buyer, or refine your financial strategy, an accurate valuation provides the clarity needed to make informed decisions.

Interchange Capital Partners works with family business owners to quantify their company’s worth and develop strategies to maximize value over time. If you’re ready to take a deeper look at your business valuation and future planning, let’s start a conversation. Contact us at team@interchangecp.com or call 412-307-4230 to set up an introductory appointment.

About Brian

Brian Baum is the CEO & President of Interchange Capital Partners, where he leads the development of innovative strategies tailored to the unique needs of private and multi-generational companies. Early in his career, Brian conducted over 1,000 interviews with CEOs, Presidents, and Chairmen of privately held companies, uncovering a critical insight: the larger the company, the more likely the owners were to struggle with complex family, business, and ownership dynamics. Even more striking was the realization that many of these business leaders were unaware of these complexities and the sophisticated level of advice needed to effectively navigate them.

Armed with this understanding, Brian has been instrumental in reshaping Interchange’s focus, aligning its services with the lifecycle of generational transitions. His approach provides owners with expert guidance through the critical phases before, during, and after an ownership change, addressing both the immediate needs and the long-term vision of the business and family. Under Brian’s leadership, Interchange has become a leading resource for business owners seeking to solve intricate challenges and create lasting value.

Brian's vision extends beyond traditional financial advice; he positions Interchange as a family business advisory firm, recognizing the interconnectedness of family and business in creating enduring success. His leadership is not only about working to optimize financial outcomes but also about enhancing the overall well-being of the families he serves. Interchange’s work involves coordinating all aspects of a family's financial, business, and ownership strategies, akin to managing an outsourced family office, ensuring that no aspect is overlooked.

Brian’s educational background includes a Bachelor of Arts from Penn State University, where he majored in Psychology and minored in Business. He is also a Certified Exit Planning Advisor (CEPA) and a CERTIFIED FINANCIAL PLANNER™ (CFP®).

Outside of work, Brian enjoys spending quality time with his wife, Natalie, and their two daughters, Quinn and Blair. He is an avid golfer and enjoys the occasional scotch and cigar. To learn more about Brian, connect with him on LinkedIn.

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