The Value of Your Business: Everything Besides Profits & Revenue

Over the past 10 years, I have had the honor of working with business owners across the country and when the topic of eventually selling their business came up, I could hear the stress in their voice about the unknown. The question of "What will I get from the business sale?"

According to Morgan & Westfield, a leading M&A firm they estimate that :

• Small Businesses – the success rate for small businesses to actually sell is to be in the range of 15% to 30%.

• Mid-Sized Businesses – the success rate for mid-sized businesses to actually sell to be in the range of 30% to 70%.When most business owners think about the value of their company, they jump straight to revenue, profits, and EBITDA.

The reason the success rate is so low is due to a number of factors.

When I have these conversations with business owners, they start rattling what they think the company will get in a sale based on the "hard numbers" profits, revenue, & EBITDA. Otherwise known as Quantitative value.

But there's something equally as valuable in my opinion and that’s qualitative value.

Qualitative worth answers a different question:

How durable, transferable, and sustainable is this business without you?

Below is a practical way to think about qualitative worth, broken into eight key areas that mirror how strong businesses build their value in ways outside of the usual, profits, revenue & EBITDA.

1. Planning

Strong businesses don’t "Wing it"—they plan. Is your business plan written down and reviewed regularly?

This includes:

• Clear long-term goals

• Defined milestones

• A roadmap that aligns daily decisions with future outcomes

If the plan lives only in your head, the business becomes owner-dependent—and far less valuable.

2. Leadership

Leadership is not about control—it’s getting others to do what's in the best interest of the group. You can see this even in the smallest of cases. I am an avid foodie and like to visit my local Chipotle Mexican Grill occasionally. Sometimes I go to the one around the corner of my house or the one near my office. Although the company remains the same, one is significantly busier than the other. I couldn't grasp exactly why until I saw one glaring difference, leadership. When the manager was not in, the whole operation would fall to pieces and orders would take twice as long because there was no one there to address the issues that came up with confidence so it can be addressed in a timely manner. The other location, was always on time and efficient. This difference is something that should not be taken lightly. How is the leadership in your business?

Buyers look for:

• Decision-making that isn’t bottlenecked at the owner or manager. Having leaders in place at all levels of the operations will make the company more attractive.

• Leaders who can run teams independently.

• Accountability structures that scale. Having teams

Strong leadership lowers risk. Lower risk increases value.

3. Sales Process

Sales is not talent—it’s structure. Talent helps, but I have seen the most efficient sales teams have set goals or milestones to reach with comprehensive training to support them. If your a solopreneur, having set goals that are actually attainable is far more impactful than some completely audacious goals that will likely never come to fruition.

Value increases when:

• Your sales process is clearly defined.

• Messaging is consistent across all sales calls or meetings.

• Ideal customers are well-understood. selling to any customer that fogs a mirror is not a sales strategy.

If sales depend on “the owner’s charisma,” buyers see fragility, not strength.

4. Marketing

Marketing answers one simple question: Is your message reaching the right people, at the right time?

Presenting a solution when the problem pops up in your customers life is the easiest way to create opportunities.

Strong marketing value shows up as:

• Clear positioning. How you position yourself is incredibly important. Owning your target audience goes a long way in terms of value especially if you are getting interest from a segment of the market that your competitors do now have much exposure to.

• Repeatable lead flow. Having a process that is written down is important.

• Brand recognition beyond the owner’s network. Having your branding on everything can't hurt!

Predictable growth is always more valuable than unpredictable hustle. Tracking your marketing efforts and showing the conversion rate for your efforts to a potential buyer is another attractive point for the buyer. The more years of data, you can show, the better.

5. People

People are either a force multiplier—or a constant risk. Having the right people in place matched to their personalities and tendencies is a difference maker on its own. Have you done personality assessments on yourself and team members to match them to their best spot within the organization?

Buyers look for:

• The right people in the right seats

• Defined roles and responsibilities

• Reduced reliance on any one individual. Unless you plan on selling the business to your key person, it'd be wise to spread the responsibilities throughout the organization.

A business that survives vacations is worth more than one that collapses without you.

6. Operations

Operations answer the question: Does this run smoothly without constant fixing?

An efficient operations system is well-documented and easily repeatable. Policies & Procedures manual should be your company's "holy grail". It must be so detailed that even a 14-year-old child can pick it up and know what to do.

Strong operations include:

• Documented systems

• Efficient workflows

• Clear processes that reduce errors and burnout

Operational stability saves time and reduces costly mistakes which drives a more attractive valuation.

7. Finance

Finance isn’t just accounting, it requires setting clear goals for the company to reach. Yes, profits, revenue, debt level all are important for a potential buyer to see but what about cash on hand? By keeping cash on hand allows you make decisions that you may not have made if you had nothing in the bank. Not only that, but keeping cash on hand shows the potential buyers that the business runs without you drawing down all your cash reserves, another attractive value add.

Financial value increases when you can:

• Clearly quantify & track performance

• Keep cash on hand 3-6 months generally, but will be different based on the type of business you own.

• Tie financial results to strategic decisions

If the numbers tell a clear story, buyers trust the business faster.

8. Legal

Legal structure is the armor around your business. I have personally seen businesses do the other 7 areas incredibly well but fail on this one area and end up losing the business altogether. This is why this is probably the most important area to reduce risk in your business. How are you ensuring your company does not get into any legal trouble?

This includes:

• Proper entity structure

• Clean contracts

• Intellectual property protection

• Risk mitigation

Strong legal foundations prevent small problems from becoming catastrophic ones.

Why This Matters for Business Owners

You don’t build qualitative worth all at once.

It compounds over time—through better decisions, stronger systems, and clearer roles.

The takeaway is:

A valuable business is not just profitable. It is transferable.

Whether you plan to sell someday or simply want more freedom today, focusing on these qualitative drivers puts you in control—rather than trapped inside your own company.

If you'd like help reducing risk in your business, book your free consultation below.

About the Author

Marc Lowe, CFP® is a fee-only fiduciary advisor based in Waterford, CT, helping retirees & business owners make smarter financial decisions.

CEO & Founder of In The Money Retirement Planning

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