How Much Is Your Company Really Worth?

A quick, condensed guide for the entrepreneur who knows that the difference between „I love it” and „I’ll buy it” can sometimes be a few extra zeros on a wire transfer. „The market pays for what works. Not for what won’t topple at the first gust of wind.”
– a seasoned (and wealthy) investor

Use Your Head, Not Your Heart 

You see years of sleepless nights, gallons of coffee, and emotions running high like overtime in a Champions League final.
The buyer sees an Excel file and three metrics.
Your job is to build a bridge between the two – before that potential investor goes looking for another bridge 😉

A Six-Pack of Common Sense for Company Valuation 

1. EBITDA multiple – value ≈ EBITDA × (3–7).
   Works for SMEs with predictable cash flow.
2. Revenue multiple – value ≈ ARR × (1–4).
   The darling of SaaS and subscription models with low churn.
3. Owner’s DCF – total payouts × (3–5).
   Dividend-driven companies thrive here.
4. Public comps – EV/EBITDA of “clone” companies.
   For industries with their lookalikes on the stock exchange.
5. Transaction benchmarks – who bought whom, and for how much, yesterday.
   A must-have in active M&A sectors.
6. Investor common sense – the ultimate question never changes: „How much, and when, do I get paid?”

How to Use These Tools Without Losing Your Mind 

a) Focus on the trend, not the quarterly snapshot.
b) Apply several methods at once – if the numbers „dance” the problem is the frame, not the dance.
c) Take off the rose-colored glasses and get input from someone with no skin in the game.
d) Fix fundamentals instead of sugarcoating numbers: governance, processes, managers whose CV doesn’t read „owner’s last name.”
e) Remember the multiplication rule of risk: the more depends on you, the lower the multiple. Nobody’s buying your brain as part of the package.

Pre-Meeting Checklist for Buyers 

a) EBITDA calculated without creative accounting.
b) Owner’s cash flow (salaries, dividends, perks).
c) Up-to-date list of comparable companies.
d) Latest industry transactions (with date and source).
e) Succession plan – who’s in charge when you’re catching sun on the beach.
f) Risk map (taxes, customers >20% of revenue, licenses).
g) The minimum price at which you walk away without regret.

The Calculator Rule

Your company is worth exactly what someone today is willing to pay – provided they can count it better than you.
Yes, it stings sometimes. But then the wire hits your account – and that’s the best painkiller business has ever invented.

Good luck with the numbers, and may common sense be with you!