Family businesses are special. They're often built with heart, sacrifice, and years of sweat equity, not just spreadsheets. So when it comes time to value one, whether for sale, succession, or strategy, it’s important to get it right.

At Sherpa, we believe your business is worth more than just the numbers. Here’s how to approach valuation with clarity, confidence, and a little less stress.

Start with What Makes Family Businesses Different

Unlike big companies, family run businesses tend to have a soul. But they also tend to have a few quirks.

Owner Reliance. Often, the business is the owner. Buyers and valuers need to understand how things will run without you at the helm.

Community Reputation. Been around for decades? A well loved brand or long term client base carries value, even if it doesn’t show up on your balance sheet.

Legacy Mindset. You're not just selling stock and systems, you're handing over something personal. That emotional weight matters.

The Financials Still Matter Big Time

When it’s time to crunch the numbers, you’ll want to clean up the financials to show true profitability.

Adjust for Owner Perks. Many family businesses run expenses like cars, phones, or travel through the business. These get added back during valuation.

Discretionary Spending. If you’ve taken a conservative salary or reinvested profits, we adjust for that too.

Consistent Cash Flow. The smoother and more predictable your cash flow, the higher your business is likely to be valued.

Bottom line. Clean books equal more trust from buyers and banks.

Use the Right Valuation Methods

There’s no magic number, but there are proven ways to get a fair range.

EBITDA Multiples. A common method where we apply a multiple, usually 1.5x to 3.5x for small businesses, to your earnings. The stronger the business, the higher the multiple.

Comparable Sales.

We look at what similar businesses in your industry and region have sold for recently.

Asset Based Value.

If your business has significant property, machinery, or inventory, that gets factored in too.

Goodwill and Intangibles.

Got a killer brand, loyal customer base, or strong online presence? That’s value too, even if it’s not on paper.

Don’t Forget the Intangibles

A lot of the value in small businesses comes from things spreadsheets can’t measure.

Longstanding supplier relationships.
Stable, trained staff.
Local trust and name recognition.
Systems and processes that actually work.

At Sherpa, we help you highlight these assets to give buyers the full picture and you the best chance at a premium sale.

The Sherpa Take

Valuing a small, family owned business is part science, part storytelling. Yes, you need clean numbers. But you also need to tell the story of your business’s value, why it works, why it lasts, and why someone else should be proud to own it.

Ready to get a feel for your value?

Start Your Free Appraisal.