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Business Owners & Exit Planning

Building Value #2: What’s Your Multiple?

Episode 2 of Building Value explains the valuation multiple: the figure applied to your earnings to estimate what your business is worth. Understanding what drives your multiple, and how to improve it, is central to growing transferable business value before an exit.

Brook HartBuilding Value #2

Episode 2 of Building Value explains the valuation multiple: the figure applied to your earnings to estimate what your business is worth. Understanding what drives your multiple, and how to improve it, is central to growing transferable business value before an exit.

Key takeaways

  • A valuation multiple is applied to earnings to estimate business value.
  • Higher multiples reflect lower risk, recurring revenue, and reduced owner dependence.
  • Improving the multiple can raise sale value more than growing revenue alone.
  • Knowing your multiple early helps owners target the drivers of a better exit.
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Written by

Brook Hart

President & Chief Compliance Officer · CFP®, CEPA®

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