Transferability
A business that depends on the owner for sales, relationships or daily decisions is harder for a buyer to underwrite.
Sell my business
How much is my business worth?
Business value is usually a range built from maintainable earnings or cash flow, growth, risk, transferability and market evidence. The owner's final proceeds also depend on debt, working capital, deal terms and tax.
Short answerNormalize the earnings first. Apply a valuation method appropriate to the company, then adjust enterprise value for cash, debt, working capital and other transaction items. A multiple without a defensible earnings base is not a reliable valuation.
The value equation has two sides
- Earnings base: revenue quality, margins, normalized costs and sustainable cash generation.
- Risk and multiple: concentration, owner dependency, systems, growth, industry and buyer competition.
- Transaction bridge: cash, debt, normal working capital, debt-like items and terms.
- Owner outcome: fees, taxes, rollover, earn-outs and timing.
Illustrative value bridge
| Normalized EBITDA | $750,000 |
| Illustrative multiple | 4.5× |
| Enterprise value | $3,375,000 |
| Net debt and adjustments | ($425,000) |
| Illustrative equity value | $2,950,000 |
What increases or reduces the multiple?
Revenue quality
Recurring, diversified and contract-supported revenue is generally more predictable than concentrated or project-only revenue.
Financial credibility
Clean records, defensible adjustments and reliable monthly reporting reduce uncertainty during diligence.
Growth evidence
A credible pipeline and demonstrated unit economics support a different view from unsupported forecasts.
Capital intensity
Working-capital and capital-spending requirements reduce the cash available to an owner or buyer.
Deal structure
Cash at close, seller notes, earn-outs and rollover equity change risk even when the headline price is unchanged.
Prepare earnings before discussing the multiple
Review the process for a normalized EBITDA review before selling a business in Canada. Unsupported add-backs can reduce buyer trust instead of increasing value.
A valuation is not automatically a sale price
Strategic fit, financing availability, diligence findings, competitive tension and terms determine the final negotiated result. Formal valuation, tax and legal opinions may require separately qualified professionals.