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Exit Strategy · Business Valuation
What Is My Business Worth? The Truth About Valuation
Eric Gilboord · CEO, WarrenBDC · Business Sale Coach
Every business owner I've worked with has a number in their head. The number their business is worth. The number they'd accept. The number that would make everything they've built feel validated. Sometimes that number is close to reality. Often it isn't. That's not a criticism — it's just the truth. You've been inside this business for 20 or 30 years. You know what it took to build it. A buyer hasn't lived that. They're looking at numbers, risks, and what the business can do without you. Those two perspectives produce very different valuations. Getting a professional business valuation done — early — is one of the smartest moves you can make before you go to market. Here's why, and what's actually involved. Why Valuation Matters Before You SellA business valuation isn't just a number on a page. Done properly, it tells you where you stand, what's driving your value, what's hurting it, and what you can do about it before a buyer finds out first.
It sets a realistic asking price.
Overpricing kills deals before they start. Underpricing leaves real money on the table. A professional valuation gives you an objective, defensible number — one you can stand behind in negotiations without second-guessing yourself.
It attracts serious buyers.
Buyers who can write a significant cheque do their homework. A business that comes with a professional valuation report signals that the seller is organized, credible, and serious. It also gives buyers the financial clarity they need to move forward with confidence.
It strengthens your negotiating position.
When a buyer pushes back on price, you need more than a gut feeling. A proper valuation gives you solid evidence to justify your number and counter unrealistic expectations. It keeps the negotiation grounded in facts, not emotion.
It reveals what you need to fix.
A valuation will surface the strengths that make your business attractive — and the weaknesses that will give a buyer ammunition to drive your price down. Finding those now gives you time to address them. Finding them during due diligence does not.
It reduces disputes and legal risk.
A third-party professional valuation is harder to argue with than a number you came up with yourself. It reduces the likelihood of disagreements about price derailing your deal — and protects you from liability down the road.
It covers your tax and legal obligations.
A proper valuation helps determine the tax implications of the sale — including capital gains — and ensures you're meeting your disclosure requirements. Your accountant and legal counsel will need it. Don't wait until closing to find out what you owe. How Valuation Actually WorksValuation is an analytical process — not a guess and not a formula. A qualified Business Valuation Advisor (BVA) looks at your financial performance, your assets, your management team, market conditions, and industry trends, then applies one or more methods to arrive at a number. The four most common methods:
→Discounted Cash Flow (DCF) — values the business based on its future earnings potential, discounted back to today's dollars. Best for businesses with strong, predictable cash flow.
→Comparable Company Analysis — looks at similar businesses in your size and industry and how they were valued. Gives context for where your company sits in the market.
→Past Transaction Method — examines what similar companies actually sold for. Real transaction data is harder to argue with than projections.
→Asset-Based Valuation — adds up the fair market value of all company assets. More relevant for asset-heavy businesses; less useful for service or consulting businesses where the value is in relationships and expertise.
Most experienced BVAs use a combination of methods and then weigh each one based on what makes sense for your specific business and industry. There is no single right answer — but there is a defensible range, and that's what you need going into a sale. Where AI Is Changing the Valuation GameAI won't replace a qualified BVA. But it's changing how smart owners prepare for valuation — and that preparation directly affects the number you walk away with.
→Benchmark your business before the expert does — AI tools can pull industry data and comparable metrics so you walk into the valuation conversation knowing where you stand, not finding out for the first time.
→Clean up your financial data — AI can identify inconsistencies, flag anomalies, and organize three years of financials into a format that makes a BVA's job faster — and your numbers look more credible.
→Document your intangible assets — customer relationships, management depth, proprietary processes, market position. These drive significant value but are often undocumented. AI can help you build the case for assets that don't appear on your balance sheet.
→Model "what if" scenarios — what happens to your valuation if you grow revenue by 10%? Reduce owner dependency? Add a recurring revenue stream? AI tools make scenario modelling faster and more accessible than ever, so you can make informed decisions about where to invest your time before you sell.
The owners who get the best valuations are the ones who show up prepared. AI is a powerful tool for getting there. What a Business Valuation Advisor Actually DoesA BVA is not your accountant and not your financial advisor, though you need all three. Their specific job is to determine the economic value of your business — objectively, thoroughly, and in a way that holds up under scrutiny. Their work covers three areas:
Measuring Value
A BVA digs deeper than your accounting team. They uncover risks you may not be aware of, find hidden value you haven't quantified, and help you understand how each element of your business affects the final number. They look at what you have from a buyer's perspective — not an owner's.
Creating Value
A good BVA doesn't just tell you what your business is worth today — they help identify the specific drivers that will increase value before you sell. Customer relationships, management capabilities, community relationships, strategic alliances — these intangibles can move your number significantly if they're properly documented and presented.
Protecting Value
Markets shift. Risks emerge. A BVA understands the forces that can erode what you've built and can put a plan in place to protect your value as you move toward the sale. They've seen deals go sideways and know how to keep yours on track. Be honest with yourself and with your BVA. A buyer will look at your company from every angle. The more clearly you see it first, the better positioned you'll be when they do.
The Bottom Line
It took hard work and smart decisions to build your business. Selling it is no different. 80% of businesses listed for sale will not sell. The ones that do didn't get lucky — they prepared. Quick Answers
Why do I need a valuation before I sell?
Because the number in your head and the number a buyer will pay are rarely the same. A professional valuation gives you an objective, defensible price — and tells you what you need to fix before going to market. It's the foundation of a successful sale.
How do I calculate the value of my company?
You don't — at least not alone. A qualified Business Valuation Advisor uses multiple methods (Discounted Cash Flow, Comparable Company Analysis, Past Transactions, Asset-Based) and weighs them against your specific business and industry. Your accountant and M&A advisor are also part of that conversation.
What drives the most value in a small or mid-sized business?
Consistent, growing revenue. Strong management that doesn't depend on you. Documented systems and processes. Loyal customer relationships. Clean financials. A business that runs well without the owner in the room is worth significantly more than one that doesn't.
When should I get a valuation done?
Earlier than you think. Ideally two to three years before you plan to sell. That gives you time to act on what the valuation reveals — fix weaknesses, build on strengths, and increase your number before you go to market. A valuation done the week you decide to sell is too late to do much with.
What are the steps to selling a business?
In broad terms: get your valuation, assemble your advisory team, prepare your business for sale, go to market, negotiate and sign an LOI, complete due diligence, and close. Each step takes longer than most owners expect. The ones who start early and prepare properly get better outcomes.
Disclaimer: Eric Gilboord and WarrenBDC do not provide legal, financial, or professional services advice. This content is for educational purposes only. Always engage qualified professionals — including an accredited Business Valuation Advisor — when making decisions about selling your business.
© Eric Gilboord · WarrenBDC · syb4m.com
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Exit Strategy · Due Diligence
The M&A Due Diligence Checklist: What Buyers Want and How to Be Ready
Eric Gilboord · CEO, WarrenBDC · Business Sale Coach
You've had the conversations. You've provided the overview materials. You've gone back and forth and finally landed on an LOI — a Letter of Intent — that both sides can live with. You're feeling good. Now the real work starts. Due diligence is where deals get made — or fall apart. Any buyer who can write the size of cheque you're hoping for will not do it on faith. They are going to look at everything. And I mean everything. How long does it take to sell a business? This is where the time goes. How prepared you are for due diligence will determine how smoothly it goes — and whether the deal closes at all. What Buyers Are Actually Looking ForA serious buyer — and their M&A consulting team — will need to fully understand and assess your business across six areas:
→Financial Statements — three years of clean, accurate numbers
→Legal Records and Procedures — contracts, agreements, any outstanding issues
→Organizational and Operational Details — how the business actually runs day to day
→Material and Partnership Contracts — supplier relationships, key agreements
→Intellectual Property — what you own, what you've protected
→Employee and Management Details — who runs what, and what holds them there
If you're thinking about selling to a competitor, the same list applies. They have the same checklist. Don't assume that because they know your industry they'll skip steps. They won't. This isn't personal. A buyer's M&A team has a fiduciary responsibility to protect their client's investment. If they don't do proper due diligence and something goes wrong after closing, it's a very expensive problem for everyone. They are thorough because they have to be. The Honest Truth About PreparationMost sellers are not ready when due diligence starts. They scramble. They can't find documents. They discover problems they didn't know existed — or worse, problems they knew about and hoped nobody would notice. That's how deals die. If you start now — before you have a buyer — and think like a buyer, you can fix problems in advance, fill gaps in your documentation, and reduce the landmines that blow up deals at the worst possible moment. Do not hold back information. Do not hide anything. Do not lie. If a buyer discovers something after closing that you knew about and didn't disclose, you will be hearing from their lawyers. The full monty. That's what due diligence is. Where AI Gives You a Real AdvantageHere's something most sellers don't think about until it's too late: due diligence is a documentation game. The more organized, complete, and accessible your information is, the smoother the process goes — and the more confidence it builds in your buyer. AI can help you get there before the buyer shows up.
→Organize and summarize financial records — use AI to spot inconsistencies, flag gaps in your three-year financials, and prepare clean summaries before your advisors even ask.
→Document your operational processes — AI can help turn what's in your head (or your key employee's head) into written systems and procedures that a buyer can evaluate and trust.
→Review contracts and agreements — AI tools can scan large volumes of documents, flag missing clauses, expiry dates, or unusual terms that need attention before due diligence begins.
→Build your data room faster — the virtual data room is where you store and share due diligence documents with the buyer. AI can help you organize, label, and index everything so nothing gets missed and the buyer's team can move quickly.
A well-organized seller signals a well-run business. That matters to buyers. It speeds up the process, reduces friction, and protects your deal price. The Due Diligence Checklist: What to PrepareEvery deal is different. Your M&A advisor and legal team will adjust the list based on your company and your buyer. But here's a solid starting point across the major categories.
Financial Records
Three years of financials is the baseline. Buyers want bank statements for all business accounts, lines of credit agreements, credit card statements, all loan and debt agreements, and trial balances. Clean books accelerate everything. Messy books kill deals.
Tax Information
Federal and provincial tax returns for the last three years, plus property tax statements, tax credits and supporting documents, and any agreements that reduce or defer tax liability. Surprises here are expensive. Know what's in your file before the buyer does.
Sales & Marketing
Impressive revenue claims need hard data behind them. Buyers want customer, product line, and geographic revenue breakdowns; sales pipeline and win rate data; customer loss rates; product line lists; SWOT analysis; and salesforce compensation plans. This is where the story of your business gets validated — or doesn't.
Human Resources
Employee agreements, consulting contracts, recruitment and hiring policies, benefits documentation, HR handbooks, a full employee list with roles, and any disciplinary matters. Who your people are and what holds them to the business is a critical part of what a buyer is acquiring.
Intellectual Property
What you've built, what you've protected, and what you own outright. Patents, trademarks, proprietary systems, software, trade secrets, and licensing agreements. If it's not documented and registered, it's harder to transfer — and harder to value.
Technology & Operations
Hardware and software lists, IT staff, data storage and security policies, vendor agreements, IT project details, cybersecurity protocols, disaster recovery plans, and any history of breaches or incidents. Technology due diligence has become a bigger deal every year. If your systems are outdated or your security is weak, buyers will either reprice or walk.
Employment Practices
Internal reports, org charts, job titles and descriptions, open positions, and how your company actually operates day to day. A buyer is acquiring a business and the people in it. They need to know what they're stepping into. Three Questions Sellers Always Ask
Will everything on this checklist apply to my business?
Not necessarily. The size and complexity of your business — and your buyer's — will shape what's actually required. Your M&A advisor will help you identify what's relevant and what's not. Use this as a starting point, not a final answer.
What if I don't have all the information?
Then start building it now. The sooner you identify gaps, the more time you have to fill them. Missing documentation is one of the most common reasons deals slow down or fall apart. Don't wait until a buyer is sitting across the table.
This sounds like a lot of work. Do I really have to do all of it?
Yes. But you don't have to do it alone. This is exactly what your M&A team, your legal counsel, your financial advisor, and your sale advisor are for. Delegate the checklist items directly through your intermediary. Broken telephone at this stage costs you money and time. The 5 Stages of a Business SaleIf you're newer to this process, here's the big picture of how an M&A transaction typically unfolds:
1.Assessment and preliminary review — initial information gathering and business evaluation
2.Negotiation and letter of intent — agreeing on the broad terms before the deep dive
3.Due diligence — this is where you are now. This is where the time goes.
4.Negotiation and closing — finalizing terms and signing
5.Post-closing integration — the transition begins
The Bottom Line
It took hard work and smart decisions to build your business. Selling it is no different. 80% of businesses listed for sale will not sell. The ones that do didn't get lucky — they prepared. Quick Answers
What is M&A due diligence?
It's the process a buyer uses to verify everything you've told them about your business — financials, legal, operations, employees, technology, and more. It's how they confirm the business is worth what they're paying. No serious buyer skips it.
How long does due diligence take?
It depends on your preparation and the complexity of your business. For most small to mid-sized companies, it runs 30 to 90 days. Sellers who have their documents organized and their house in order move through it faster. Sellers who are scrambling drag it out — and sometimes lose the deal entirely.
What happens if something comes up during due diligence?
It depends on what it is. Minor issues can often be addressed or negotiated around. Major surprises — undisclosed liabilities, inaccurate financials, legal problems — can reprice the deal or kill it. The best strategy is to find and address problems yourself before the buyer finds them.
Do I need a sale advisor or M&A consultant?
Yes. This is not the time to go it alone. Your M&A team — including your sale advisor, legal counsel, and financial advisor — will guide you through the checklist, communicate with the buyer's team, and protect your interests throughout the process.
Disclaimer: Eric Gilboord and WarrenBDC do not provide legal, financial, or professional services advice. This content is for educational purposes only. Always seek qualified professional help when preparing M&A due diligence documents.
© Eric Gilboord · WarrenBDC · syb4m.com
Exit Strategy · Business Sale
When Is The Right Time To Sell Your Business?
Eric Gilboord · CEO, WarrenBDC · Business Sale Coach
You built this company with your own hands. You showed up before everyone else, stayed late, made the hard calls, hired the wrong people, hired the right ones, survived recessions, a pandemic, and a supply chain that seemed personally out to get you. You did all of that. And somewhere in the back of your mind, for longer than you want to admit, you've been thinking about the exit. Maybe you've casually researched it. Talked to a friend who sold. Picked up a book. Googled "how much is my business worth" at midnight and then closed the browser before anyone could see. Then you went back to running the company because selling was never really serious — you still had too much to do. Here's the truth: the best time to start preparing to sell is before you're ready to go. Most Gen X business owners are sitting on their most valuable asset and don't fully realize it. In Canada alone, there are an estimated 550,000 Boomer and Gen X business owners expected to exit in the next decade. That's a lot of businesses hitting the market at the same time. The owners who get top dollar will be the ones who prepared. The ones who didn't? They'll either leave money on the table or struggle to find a buyer at all. The Signals That It Might Be TimeThere's no single moment when a light goes on and says sell now. It's usually a collection of signals that build up over time. Here are the ones I see most often.
You're chasing a new idea.
You've got something new pulling at your attention — a different business, a passion project, a concept you can't stop thinking about. Trying to run two things at once rarely ends well. One of them suffers. Usually both.
Life has changed around you.
You're in your 50s or 60s. A parent needs care. Your spouse retired and is waiting for you to show up. The kids have no interest in taking over — and that's okay, even if it stings a little. The personal priorities that once fit neatly around your business schedule no longer do.
You've stopped having fun.
This one matters more than people admit. The energy that drove you to build this thing — the problem-solving, the momentum, the satisfaction of making something work — has faded. You look for reasons not to go in. You leave earlier than you used to. The business still runs, but you're not really there anymore. That's a signal.
The business has outgrown you — and that's a compliment.
You built a great management team. The company runs well without you in every meeting. Your people have it handled. That's actually the ideal time to sell — when a buyer can see the business functions independently of the founder.
Your industry is shifting.
Markets change. The things that made you successful for 20 years may not be what drives the next 10. If your sector is consolidating, shrinking, or being disrupted, getting out at the right time beats hanging on too long.
Someone came knocking.
You got an email or a call from someone claiming to have a buyer for your company. Most of these go nowhere. But it got you thinking — and that's worth paying attention to. What would you do if it were serious?
Retirement isn't hypothetical anymore.
When retirement shifts from "someday" to "soon," the math changes. Over 82% of business owners expect the sale of their company to fund retirement. That's not a backup plan — that's the plan. Which means the business has to be ready when you are. What's Holding Most Owners BackLess than 10% of business owners have a formal exit or succession plan in place. That number still surprises me, even after years in this business. The reasons vary. Some owners don't want to think about it — the business is their identity and the exit feels like an ending. Some think they can figure it out when the time comes. Some have convinced themselves the company isn't worth as much as it could be, so why bother. Here's what I know: the owners who prepare get dramatically better outcomes than the ones who don't. This Is Where AI Changes the GameHere's something that wasn't true five years ago: you now have access to tools that can meaningfully increase the value of your business before you sell — without adding headcount or taking on risk. AI isn't just for tech companies. It's for the business you're running right now. Think about what buyers actually look for: strong systems, predictable revenue, a business that doesn't depend entirely on the owner, clear documentation, and growth potential. AI can help you build all of that.
→Document your processes — the ones that live in your head or in a single employee's head. Turn tribal knowledge into operational systems a buyer can see and trust.
→Analyze your customer data — which customers are most profitable, which relationships are at risk, where the real revenue growth is hiding.
→Sharpen your financials — identify cost inefficiencies, clean up reporting, build the kind of clear picture that makes due diligence easier and faster.
→Automate repetitive tasks — so the business looks leaner and runs more predictably without you.
A business that runs on documented systems, with clean data and repeatable processes, is worth more than one that runs on the owner's relationships and institutional memory. Buyers pay a premium for businesses that don't require them to depend on the seller staying around. You don't need to be a tech person to use these tools. You need a plan and the right support to implement it. The Bottom LineIs it time to sell? Only you know the answer. But if you're asking the question — even quietly — that's usually a sign it's time to start getting serious about the answer. The process takes longer than most owners expect. It's more complicated and more expensive in time and energy than you think going in. The owners who do well are the ones who start preparing early, get the right advisors in their corner, and use every available tool — including AI — to maximize what they've built. You spent decades building something valuable. Don't leave the last chapter to chance.
The Bottom Line
It took hard work and smart decisions to build your business. Selling it is no different. 80% of businesses listed for sale will not sell. The ones that do didn't get lucky — they prepared. Quick Answers
When should you sell?
When you're emotionally ready to move on and no longer willing to invest in growing the value of the business. But ideally, you've prepared well before that moment arrives.
How do you know when to close instead of sell?
Have an honest conversation with your accountant and a business advisor. If the business can't run profitably, closing is the responsible move. If it can — sell it, don't close it.
How do I find out what my business is worth?
Start with a conversation with your accountant, a business broker, or an M&A advisor. For a larger or more complex business, hire a licensed business valuator for a formal assessment.
What's the right way to close a business if it comes to that?
Be responsible and honest — with yourself first, then with your employees, suppliers, and customers. How you finish matters.
What are the real reasons businesses close?
When they can no longer operate profitably and there's no realistic path to change that. If the business still has value, the right move is to sell it, not shut it down.
© Eric Gilboord · WarrenBDC · syb4m.com
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