Decipher Your Value

Decipher Your Value I help small business owners understand the true value of what they’ve built.

After years in the business brokerage world, I saw too many entrepreneurs guessing their value, leaving money on the table, or waiting too long to plan an exit.

Buying out a partner is rarely just about the numbers. It’s about not burning the bridge you both spent years building. ...
05/19/2026

Buying out a partner is rarely just about the numbers. It’s about not burning the bridge you both spent years building. 🤝

In my 8+ years as a business broker and after 100+ valuations, I’ve seen these deals go perfectly, and I’ve seen them turn into legal battles that drain the company dry. The difference? How you approach the valuation.

Forget the $10k certified valuation fee. If you’re looking for "fair," start with SDE (Seller’s Discretionary Earnings).

3 steps to a fair buyout:
1. Normalize SDE: Add back both salaries, then subtract the cost to hire a manager to replace the leaving partner.
2. Apply a Multiple: Most small service or manufacturing shops trade between 1.5x and 3.0x SDE.
3. Keep it Pro-Rata: If you’re 50/50, split it 50/50. Skip the "minority discount" corporate jargon: it usually just leads to a personal grudge.

Valuing a business fairly is about transparency, not just spreadsheets.

Read the full guide on how to handle the "Partner Buyout" without the headache:
https://www.decipheryourvalue.com/post/how-do-i-value-a-business-to-buy-out-my-partner-fairly

In over 8 years of business brokerage and 100+ valuations, I’ve seen one question reveal everything: If you took a month...
05/15/2026

In over 8 years of business brokerage and 100+ valuations, I’ve seen one question reveal everything: If you took a month-long vacation, would your business grind to a halt?

I call this the "Hit by a Bus" test.

Most owners I meet aren't selling a business; they're selling a high-stress job. Take Julian: he knows every driver, handles every dispute, and works 70 hours a week. His revenue is great, but his value is low because he IS the business.

Then there’s Elena. She spent two years building "the machine." She documented processes and hired a manager. If she leaves, the profit stays.

A buyer isn't just buying your earnings today; they’re buying confidence in those earnings tomorrow.

The more the business needs you, the less it’s worth.

To increase your value:
1. Fire yourself from the day-to-day.
2. Build Standard Operating Procedures (SOPs).
3. Diversify your customers.

Building a business that runs without you isn't just about the exit: it’s about freedom.

Stop owning a job. Start building an asset.

Mark Reynolds had a "magic number" in his head: $3 million.He figured twenty years of hard work should be worth at least...
05/04/2026

Mark Reynolds had a "magic number" in his head: $3 million.

He figured twenty years of hard work should be worth at least what his neighbor’s tech firm sold for. But in the world of business exits, "years of hard work" isn't a line item on a valuation.

After 8 years in business brokerage and over 100 valuations, I’ve seen this wake-up call happen more times than I can count. Value isn't a gut feeling. It’s based on data, risk, and cash flow.

If you’re an owner-operator, the most important number to understand is SDE: Seller’s Discretionary Earnings.

For Mark’s construction company, we moved past the $3M dream to a defensible reality. We calculated his net profit, then added back his salary, personal vehicle, and health insurance.

The Result:
- Bottom Line Profit: $200,000
- Owner Add-backs: $165,000
- Total SDE: $365,000

By applying a 3x market multiple, his actual business value was $1.1M.

It wasn’t the number he wanted, but it was the clarity he needed. He realized that to hit his $3M goal, he had to stop being the "Operator" and start building systems that didn't depend entirely on him.

Clarity is the first step toward a successful exit.

Mark almost left $350,000 on the table because of a single word. He’d built his manufacturing company for twenty years a...
04/28/2026

Mark almost left $350,000 on the table because of a single word. He’d built his manufacturing company for twenty years and was ready to sell. He told his advisor, "I need an appraisal."

3 weeks later, he got a report back: $400,000. That was the value of his CNC machines and trucks. But the actual price a buyer would pay for his cash flow and reputation? $750,000.

I see this mix-up quite a bit. Using the wrong term isn't just a typo — it's a mistake that can erase hundreds of thousands of dollars of value you've spent years building.

Valuation = The Whole Business. It’s about your future cash flow, brand, and systems.
Appraisal = Specific Assets. It’s about the physical "stuff" you own.

Which one do you actually need?
- Selling the whole company? You need a Valuation.
- Buying out a partner? You need a Valuation.
- Getting a loan for a new machine? You need an Appraisal.
- Settling an insurance claim for a flood? You need an Appraisal.

An appraiser looks at serial numbers. A valuation expert looks at your P&L and market multiples.
Know what report helps you reach your goal. Understanding the difference is how you protect the equity you’ve spent years building.

Your CPA is doing their job perfectly by minimizing your taxes. But that same strategy can kill your business’s value if...
04/24/2026

Your CPA is doing their job perfectly by minimizing your taxes. But that same strategy can kill your business’s value if you aren’t careful.

In my 8 years of business sales and 100+ valuations, I’ve seen this often: an owner is proud to have “zeroed out” their tax liability, only to find that on paper, their business looks like it’s failing.

The disconnect is simple:

A CPA’s mission is to minimize your profit on paper to shrink your taxable income.

A Valuation Expert’s mission is to find your true earning power.

I look for “Add-Backs”: personal expenses, one-time costs, and non-cash items your CPA worked to hide. My job is to show a buyer and a bank what the business actually generates in cash flow.

Both roles are essential, but they are playing different sports. Relying only on your tax return to define your value often means leaving six figures on the table.

Tax planning saves you money today. Valuation builds your wealth for tomorrow.

I’ve seen deals fall apart in the eleventh hour because an owner didn't understand the rules of the SBA game. If you’re ...
04/22/2026

I’ve seen deals fall apart in the eleventh hour because an owner didn't understand the rules of the SBA game.

If you’re selling your business, there’s a probability your buyer is using an SBA loan for financing.

Here are the 10 things you need to know:

1. The $5M Cap: Most small businesses fit here, keeping your buyer pool massive.
2. Tax Return Rule: If profit isn't on the tax return, it doesn't exist to a lender.
3. Owner-Dependency: If the business can't survive 90 days without you, it isn't SBA-lendable.
4. Cash Flow (DSCR): Banks look for a 1.25x ratio. Messy add-backs will kill your deal.
5. Standby Notes: Expect to keep 5-10% skin in the game, often waiting years for payment.
6. Appraisals: Old equipment often appraises for scrap value, which can create a price gap.
7. Buyer Eligibility: Buyers must be US citizens or green card holders.
8. The Timeline: SBA deals take 90 to 120 days. You must keep revenue steady during this limbo.
9. Non-Competes: You can’t take the cash and open a rival shop next door.
10. The 90% Cash Reality: You walk away with 90% or more of your money in cash at closing.

Understanding these rules before you go to market isn't optional. It's the difference between a deal that closes and one that collapses.

The day you decide to sell is the worst day to start preparing.Not because your business isn't valuable, but because you...
04/21/2026

The day you decide to sell is the worst day to start preparing.

Not because your business isn't valuable, but because you never prepared it to look valuable to a buyer.

Here's what actually moves the needle on your sale price:

→ Clean, consistent financials (3+ years)
→ Revenue that doesn't depend on you personally
→ Documented systems and processes
→ A diversified customer base (no one client over 20%)
→ Recurring or predictable revenue streams

Buyers aren't just buying what your business earns today.
They're buying their confidence in what it will earn tomorrow.

The businesses that command premium multiples are the ones that reduce perceived risk, before they ever go to market.

If you're thinking about selling in the next 1–5 years, the time to start is now.

What you’re feeling in your business usually isn’t random.But it’s also not as complicated as it seems.If you wanted a q...
04/16/2026

What you’re feeling in your business usually isn’t random.

But it’s also not as complicated as it seems.

If you wanted a quick way to see where value might be slipping, start with this:
If you stepped away for 30 days, what would actually slow down?

Where does the business rely on you more than it should?

What part of your numbers feels “off”… even if you can’t explain why?

Most owners don’t need more data.

They need a clearer lens.

Because those answers usually point to the same things:
– Dependency
– Friction
– Blind spots in the numbers

Not obvious problems.

Just small things that quietly affect how the business runs… and how it would be viewed from the outside.

That’s where the gap is.

One thing I’ve seen over and over:Owners don’t usually have a “bad” business:they just don’t see it the way a buyer woul...
04/16/2026

One thing I’ve seen over and over:
Owners don’t usually have a “bad” business:

they just don’t see it the way a buyer would...

You’re focused on running it.

A buyer is asking:
How much depends on the owner?

How predictable is this income?

How is the customer concentration?

What breaks if I take over?

That difference in perspective
is where a lot of value gets lost (or protected).

Buyers don’t want to buy your 80-hour work week.I’ve seen this play out dozens of times. An owner builds a business doin...
04/11/2026

Buyers don’t want to buy your 80-hour work week.

I’ve seen this play out dozens of times. An owner builds a business doing $2M in revenue, but they’re also the head of sales, the lead technician, and the person who unlocks the front door every morning.

To a buyer, that’s not an investment. That’s a high-stress job they have to pay for.

The architecture of a sellable asset isn't just about the top line. It’s about how well the machine runs when you’re not in the room. If the business breaks the moment you go on vacation, the market price will reflect that risk.

I remember working with an operator who thought his business was worth millions because of his personal reputation. But once we looked under the hood, the assets were just his cell phone contacts and his personal grit. No systems. No team. No transferability.

To turn a job into an asset:

1. Standardize your operations so someone else can run them.
2. Build a team that makes decisions without you.
3. Diversify your client base so one exit doesn't sink the ship.

Stop building a job. Start building an asset that can stand on its own.

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20501 Anza Avenue
Torrance, CA
90503

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