Business Valuation in Fort Worth, TX

A Number Built on Evidence

Owners tend to carry a figure in their head. Sometimes it comes from a neighbor's sale, sometimes from what they need to retire. A buyer will not care about either one.

A useful valuation starts with what the company actually earns, then asks how much a buyer would pay for those earnings given the risks they take on. That is the number that holds up when offers come in.

Step One: Find the True Earnings

Your tax return shows taxable income, which most owners work hard to keep low. A buyer wants to see what the business really produces for its owner, so the broker recasts your financials.

Recasting means adding back costs that a new owner would not carry. Common examples include:

• Your own salary and benefits, when measuring SDE
• A family member on payroll who does not work in the business
• A personal vehicle or travel run through the company
• A one time legal bill, move or equipment repair
• Rent above market if you own the building and lease it to the company

Every add-back needs proof. A buyer's lender will check them, and any you cannot document will come out of the price.

Step Two: SDE or EBITDA

Seller's discretionary earnings, or SDE, counts one owner's full pay as part of the profit. It suits companies where the owner works in the business every day.

EBITDA assumes a paid manager runs things and measures profit before interest, taxes, depreciation and amortization. Larger companies and private equity buyers almost always think in EBITDA.

Which measure fits your company affects how buyers compare it to others, so it is one of the first things a broker settles.

Step Three: Choose the Multiple

The price is usually a multiple of SDE or EBITDA. There is no single multiple for an industry. Two Fort Worth HVAC companies with the same revenue can sell for very different prices.

These factors push a multiple up:

• Revenue that repeats, such as service agreements or contracts
• A wide spread of customers, with none holding a big share
• A manager or team that can run the place without you
• Clean books that match your tax returns
• Steady or rising earnings over the past three years

And these pull it down: a falling top line, heavy reliance on the owner, old equipment that needs replacing soon, or a lease that is about to expire.

Step Four: Check It Against the Market

Brokers compare your company to sales of similar businesses, using deal databases and their own closed transactions. Market comparisons keep the number grounded in what buyers have actually paid.

Local demand matters too. Fort Worth's growth in building, logistics and healthcare has drawn buyers who want a foothold in Tarrant County, and that interest can show up in the offers.

Broker Opinion of Value vs. Formal Appraisal

The free valuation you get through this site is a broker opinion of value. It reflects what the company would likely sell for on the open market today.

A certified appraisal is a different tool. You may need one for an estate, a divorce, a partner buyout or an SBA loan. It costs more and follows formal standards.

For a sale, a broker opinion is usually where you start. For a deeper look at methods, see our guide on how to value a small business.

What to Do With Your Number

Some owners get a valuation and list right away. Others learn the company is worth less than they hoped and spend a year or two raising it. Both are good outcomes.

If you want to grow the number first, exit planning turns the weak spots from your valuation into a list of fixes. If you are ready now, see how we help you sell your business.

Getting Started

Send us a few details through the valuation form or call (817) 555-0142. It is free, confidential and you are under no obligation to sell.