CLIENT EDUCATION SERIES | BUSINESS VALUATION INSIGHTS
What Is My Business Really Worth — and Why Does It Change?
By Christian Schweizer, MBA, CVA — December 10, 2025
If you have ever tried to answer the question “What is my business worth?” you already know how uncomfortable it can be. Most business owners have a number in mind — but that number is often based on intuition, a conversation overheard at an industry event, or what a competitor reportedly sold for years ago. As a Certified Valuation Analyst (CVA) credentialed by the National Association of Certified Valuators and Analysts (NACVA), I often work with business owners who are surprised — sometimes pleasantly, sometimes not — by what a rigorous, standards-based valuation reveals.
The honest answer to the question is this: your business has more than one value, and every one of those values can change — sometimes dramatically — based on circumstances you may not fully control. Understanding why is one of the most valuable things a business owner can learn.
Value Depends on Who Is Asking — and Why
One of the first things I explain to clients is that “value” is not a single, universal number. It is a conclusion that depends entirely on the purpose of the valuation and the standard being applied.
Fair Market Value (FMV) is the standard most commonly used in tax planning, estate and gift matters, and many legal contexts. The IRS defines it as the price at which a property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts. This is the standard most often applied, and it is the foundation of NACVA’s professional standards.
Fair Value is a legally defined standard used in shareholder disputes, dissenting shareholder actions, and certain divorce proceedings. It typically excludes discounts for lack of marketability and minority interest — which means it often produces a higher figure than FMV for the same business.
Investment Value reflects what a specific buyer would pay based on the unique synergies or strategic advantages that buyer brings to the table. This is what drives premium pricing in competitive M&A situations — and why the same business can receive very different offers from different buyers.
To make this concrete: a veterinary practice might be valued at $850,000 under FMV for estate planning purposes, at $1.05 million under fair value in a partner dispute, and at $1.4 million to a private equity-backed veterinary group looking to expand its regional footprint. Same practice. Three defensible, professionally derived conclusions.
Why the Number Changes Over Time
Even if the purpose stays the same, business value is not static. It moves in response to factors both inside and outside your control.
Factors within your control include the quality and stability of your earnings, your customer concentration (a business where one client represents 40% of revenue carries meaningful risk that depresses value), your degree of owner dependency, the transferability of customer relationships, and the cleanliness of your financial records. Buyers and their advisors scrutinize all of these.
Market conditions also matter enormously. Interest rates, for example, directly affect the discount rates applied to your projected future cash flows. When rates rise, values tend to compress — even if your business has not changed at all. Industry transaction multiples shift with private equity appetite and broader economic cycles. What sold for 6x EBITDA in 2024 may be trading at 4.5x today.
Finally, there are event-driven changes: a key employee departure, a major contract expiration, or a lease coming up for renewal can each move value significantly — often with very little warning.
What This Means for You as a Business Owner
Understanding that your business has multiple values — and that those values are dynamic — is not just an academic exercise. It has real consequences for your exit planning, your estate, your buy-sell agreement, your insurance coverage, and your negotiating position if you are ever approached by a buyer.
Most business owners have their real estate appraised and their equipment assessed. Yet their business — often their single largest asset — has never been formally valued. A periodic, standards-based valuation performed by a CVA gives you an accurate baseline, identifies value drivers you can strengthen, and ensures that any legal documents referencing your business value (buy-sell agreements, estate plans, shareholder agreements) reflect reality rather than an outdated or unfounded figure.
“Knowing what your business is worth today — and understanding why that number moves — is not just information. It is leverage. It gives you the ability to plan, to time decisions wisely, and to negotiate from a position of strength.”
This article is intended for general educational purposes and does not constitute a formal valuation opinion or engagement. Business valuations performed by this firm are conducted in accordance with the National Association of Certified Valuators and Analysts (NACVA) Professional Standards. For questions about your specific situation, please contact us.
Go to Articles overview