Nobody hires a doctor hoping to hear bad news. But the best doctors tell you the truth anyway — because finding a problem while you can still do something about it is worth infinitely more than learning about it when it is too late.
Twenty-one years in business brokerage has taught me that the same principle applies to valuation. The most valuable thing I can do for a seller — especially one who has spent 15 or 20 years building something — is not to tell them what they want to hear. It is to tell them the truth about what their business is actually worth on the market today, and why.
That conversation is almost never comfortable. And it is almost always the most important one we have.
The broker who tells you your business is worth more than it is isn’t doing you a favor. They’re setting you up for a very expensive disappointment.
The Number in Your Head
Every business owner I meet has a number. It lives in their head, sometimes for years. It is the number they plan around — the retirement they are picturing, the debt they plan to pay off, the next chapter they have been quietly designing.
That number usually has a story behind it. A competitor sold for a certain amount. A friend in a similar business got a multiple they mentioned over dinner three years ago. An accountant once said something offhand about what the business might be worth. The owner did their own back-of-the-envelope math and it came out looking good.
None of these are bad inputs. But none of them are a valuation. And the gap between that number and what the market will actually bear is where a lot of deals — and a lot of retirement plans — quietly collapse.
| The Expectation Gap
In my experience, the average seller’s expectation at first conversation sits 20 to 40 percent above where the market ultimately prices their business. That gap is not a reflection of what they built. It is a reflection of how buyers — and their lenders — calculate risk and future cash flow. |
What Buyers Are Actually Buying
Here is the core disconnect. An owner looks at their business and sees everything they put into it — the years, the relationships, the reputation, the machinery they bought, the employees they trained, the customers they kept through hard times. That is the story of the business. It is real, and it matters.
A buyer looks at the same business and asks one question: what reliable, transferable earnings can I expect to receive after I service the debt it takes to buy this?
Those are two very different lenses. And the market prices through the buyer’s lens, not the seller’s.
| What the seller believes
20 years of relationships, reputation, and sweat equity that built this to what it is today. |
What a buyer underwrites
3 years of verified financials, documented SDE, transferable customer contracts, and post-close cash flow after debt service. |
This is not a criticism of what sellers have built. It is just the math. A buyer borrowing 80 percent of the purchase price from an SBA lender needs to know, with reasonable confidence, that the business will generate enough cash to make their payments and still leave them a living. The lender underwrites the same question. Everything else — the story, the legacy, the years of sacrifice — is context, not collateral.
Why Overpricing Is the Worst Thing That Can Happen to You
Some brokers will take an overpriced listing. They figure they can always reduce the price later. And some sellers, naturally, gravitate toward whoever tells them the highest number — which is a completely human response to a very emotional situation.
But here is what actually happens when a business goes to market overpriced.
It Sits
Buyers are sophisticated. Most of them, or their advisors, understand market multiples. When they see a business priced at four times earnings in a market that clears at two and a half, they do not submit a low offer — they move on. They have other businesses to look at. Your listing ages. Days on market accumulates. And in business sales, nothing poisons a deal faster than the question ‘Why has this been on the market for nine months?’
The Price Drop Does More Damage Than the Original Discount Would Have
When you reduce the price after sitting on the market, buyers smell blood. They assume something is wrong — something you are not disclosing. They lowball. They add contingencies. The deal structure gets worse. You often end up at a lower net than you would have received from a clean, realistically priced listing that attracted a qualified buyer quickly.
You Lose the Best Buyers
The best buyers — well-capitalized, experienced operators who know what they are doing — are also the most disciplined. They filter quickly and move on. The buyers who linger on overpriced listings are often less experienced, more likely to get cold feet in due diligence, and more likely to back out at the financing stage. Pricing correctly upfront selects for the right buyer pool.
Overpricing doesn’t protect your number. It destroys your deal quality and, in many cases, your final net proceeds.
The Doctor Analogy — and Why I Use It With Every Seller
When I sit down with a seller and the number I come to is lower than what they expected, I tell them this: imagine you went to a doctor feeling fine, and the doctor found something that needs attention. You have two choices. You can find a doctor who tells you you’re fine and sends you home. Or you can work with the doctor who found the problem and has a plan to address it.
The first doctor feels better in the short term. The second one actually helps you.
A realistic valuation — one that reflects what the market will bear, what a lender will finance, and what a qualified buyer will pay — is not a verdict on the quality of what you built. It is a diagnosis that tells us where you are today, and what we need to do to get you to the outcome you are actually after.
Sometimes that means going to market now, priced correctly, and getting a clean deal done. Sometimes it means spending 12 to 18 months addressing the things that are suppressing the value — fixing the books, reducing customer concentration, documenting processes — and then going to market at a meaningfully higher number. Both are legitimate paths. Neither starts with wishful thinking.
What an Honest Valuation Actually Gives You
A realistic valuation is not just a number. It is a road map.
It tells you which specific factors are holding your price down, and by roughly how much. It shows you what buyers in your category are actually paying, and what distinguishes the businesses that sell at the top of the range from those that sell at the bottom. It gives you a basis for making real decisions — whether to sell now or invest in improvements first, whether your retirement timeline is feasible or needs adjusting, whether there are structural changes that would meaningfully move the needle.
That information is worth a lot. It is worth infinitely more than a flattering number that leads you down a two-year road to a failed deal, a price that keeps dropping, and an exit that costs you time, money, and energy you did not budget for.
| What I Promise Every Seller
I will tell you the truth about what your business is worth and why. I will show you the math, explain the market, and walk through what is driving your number — up or down. And if there are things we can fix before going to market, I will tell you that too. What I will not do is give you a number designed to make you feel good rather than set you up for success. |
The Best Outcomes I Have Seen Started With an Honest Conversation
The sellers I have seen walk away most satisfied — the ones who got their number, had a smooth closing, and actually moved on to their next chapter — almost universally had one thing in common. They were willing to hear the truth early, act on it, and go to market with a realistic price and a clean story.
They were not always the sellers with the biggest businesses or the most impressive financials. They were the sellers who understood that the goal was not to win an argument about what their business was worth. The goal was to close.
If you are thinking about selling your service or trades business in the Tampa Bay area — even if it is still a few years out — the most valuable conversation you can have is one where someone tells you honestly what it is worth today, why, and what it would take to improve that number. I have been having that conversation for over two decades. I am happy to have it with you.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 450 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential.