What Is My Business Worth? How to Build a Sale-Planning Range

Which ownership interest and planning date does the range describe?

IVSC asks a valuer to establish the subject and intended user before choosing an approach. It also requires the purpose, basis, effective date, and stated limitations. ^[1] When an estimate travels into another conversation, compare its scope with the sale question now in front of you.

For a wider valuation context, the private-company valuation desk places that scope check beside method, earnings, and offer questions that arise later in a sale discussion.

• Write the ownership interest and intended sale question before copying any value observation, then note whether the range is meant to describe that same interest.
• Record the planning date beside the financial period the range refers to, including any fact that would make the date unsuitable for the current discussion.
• State the limitation that prevents the range from becoming an appraisal conclusion and name the record that would need review before that limit can narrow.
• Mark the range as preliminary whenever its ownership interest, planning date, or stated purpose cannot yet be tied to a current company record and a defined sale question.
• Treat an earlier estimate as a dated planning record. Preserve its purpose, interest, and limitation so a later conversation can identify what has changed.
• When the date, purpose, or ownership interest cannot be matched, write the mismatch beside the range and name the document that would answer it.

A reported profit line still leaves the owner’s job open

Axial’s public calculator separates trailing revenue from net profit before tax and says that profit includes the owner’s salary. Other fields ask about growth and recurring revenue. They also ask about customer concentration, regulation, and future owner involvement. The visible fields make a reported profit line an opening question, not a settled sale fact. ^[3]

A reconciled period places owner-pay detail and continuing duties next to the account being explained. Payroll documents the pay amount. When payroll records an owner-pay amount, you can compare it with a separate owner-role note that names the decisions, relationships, or operating knowledge that will need coverage after a sale. Axial calls the method simplified and based on user inputs plus general assumptions. Its published limitation belongs with the output. ^[3]

The distinction is practical: an income statement can display a salary amount, while the owner-role record explains whether removing or replacing that person leaves a cost, an operating duty, or both. The range discussion can acknowledge the missing explanation without inventing an add-back or calling an amount transferable. ^{[1, 3]}

For detailed earnings work, the SDE and EBITDA guide takes up the later decision about an earnings measure and its adjustments. On this page, the reported line remains provisional until the operating role is named. IVSC says models organise assumptions rather than create them. ^[1]

A multiple travels with a price label and a denominator

A copied multiplier remains a report about someone else’s price and denominator. CFA distinguishes price multiples tied to the ownership interest from enterprise-value multiples tied to the operating business and EBITDA. ^[2] That difference comes before any practical question of scale: a price label compares an ownership interest, while an enterprise-value label looks across capital providers. CFA places EBITDA before interest to those providers for the same reason. Keep the labels attached to the observation; neither one supplies a company-specific sale record. ^[2]

Put the price label, earnings definition, period, and deal terms beside any observation you bring forward. A missing item makes the comparison incomplete. For a method comparison, the business valuation methods guide addresses the next question: whether a valuation approach can use the observation.

• Preserve the reported price perimeter before you compare it with an owner earnings measure, including whether the observation describes owners or the operating business.
• Match the earnings denominator to the observed multiple instead of treating a bare multiplier as a fact with a universally portable meaning.
• Record the period, capital structure, and deal terms that could make two similar-looking observations answer different sale-planning questions.
• Include the source and observation date with the labels. When a second-hand multiple loses that context, leave the range input open and return to the source record.

A value range is not an offer funds-flow

Enterprise value describes the operating business across all its capital sources, while an agreement-defined value attributed to owners and cash scheduled for closing sit in later parts of an offer. CFA’s capital-structure distinction keeps those categories separate. ^[2]

An agreement’s definitions, payoff information, and working-capital schedule belong to the later bridge. So do transaction expenses, escrow, and deferred payments. Those documents can stay outside the early range discussion until an actual offer makes the payment question live. An actual offer lets you compare those payment terms with the planning-range question. The early number remains a planning range.

For offer mechanics, the enterprise-value and equity-value guide follows those definitions through the agreement and funds-flow once an offer exists. That later route keeps an early planning number from becoming a proceeds estimate.

Ownership, earnings, comparable, and offer records behind a range

NextGen Seller’s table below is an editorial synthesis of the cited sources and Axial’s published calculator limitation. It identifies the document associated with each unresolved issue. ^{[1, 2, 3]}

An ownership document resolves a scope change. The earnings line needs a reconciliation and owner-role note. A complete transaction label affects comparison, while an offer schedule affects payment. If the remaining question is specific to your company, a confidential valuation intake can frame it without supplying a public-page conclusion.