What Is Your Business Worth?

A Business Brokerage Valuation Guide for Arizona Owners

Brought to you by Cox Business Brokers AZ | 480-235-7911

As a business owner, you've likely spent years building profits, expanding operations, and enhancing long-term value. But one question becomes inevitable: “What is my business really worth?” Whether you're preparing to sell, attract investors, secure financing, or plan for the future, knowing your business’s value is essential. At Cox Business Brokers AZ, our team of seasoned business brokerage professionals helps Arizona owners assess current market value—and position their businesses to maximize it.

Why Business Valuation Matters

Valuation isn’t just about pricing—it’s a roadmap for planning. Here's why knowing your business’s value is critical:

• Helps you price your business appropriately when selling.

• Supports investment discussions and capital-raising efforts.

• Informs partnership buy-ins or exits.

• Plays a role in estate, divorce, or tax planning.

• May be required for SBA or bank financing.

  
  

Your business's value is influenced by real-world market forces—revenue trends, buyer demand, industry multiples, and your business’s growth potential.

The Role of a Business Broker in Valuation

While online tools can give you a ballpark estimate, working with a professional business broker provides a far more accurate and comprehensive picture. At Business Brokers AZ, we look beyond the numbers:

• We review real-time comps—recent sales in your industry and region.

• We analyze cash flow—what the business actually puts in your pocket.

• We assess market conditions—buyer activity, industry outlook, and economic trends.

• We evaluate operational strength—scalability, customer mix, systems, and branding.

This full-spectrum approach means your valuation isn’t just accurate—it’s strategic.

Business Valuation Methods: An Overview

Here are three core methods used to value small to mid-sized businesses:

1. Market-Based Approach

This method compares your business to similar ones that recently sold. It uses industry-standard valuation multiples—like price-to-earnings or EBITDA multiples—to estimate worth.

2. Asset-Based Approach

This method looks at what your business owns—equipment, property, inventory, and intellectual property—minus liabilities. It’s often used for asset-heavy businesses or in liquidation scenarios.

3. Income-Based Approach (DCF)

This method estimates future earnings and discounts them back to present-day value using a rate that accounts for risk and inflation. It's ideal for businesses with stable or growing profits.

Key Factors That Influence Your Business’s Value

Many variables impact how much your business is worth, including:

• Annual revenue and profit margins

• Cash flow trends

• Debts and liabilities

• Scalability and future growth potential

• Industry trends and market demand

• Owner dependence or strength of management team

Buyers want a business that not only performs now—but has room to grow and operate smoothly without relying entirely on you.

Cash Flow: The Heart of Business Valuation

Buyers pay for cash flow—not just revenue. Stable or rising earnings give confidence in long-term success. We use seller’s discretionary earnings (SDE), EBITDA, and other metrics to reflect what a new owner can expect to earn post-sale.

What Are Valuation Multiples?

Multiples simplify value estimation by applying a number (typically between 2x–5x) to a key financial figure:

• SDE Multiple – Most common for owner-operated small businesses.

• EBITDA Multiple – Used for larger businesses with management teams.

• Revenue Multiple – Applied in high-growth or recurring-revenue models.

These multiples are shaped by your industry, size, and risk profile—and they're constantly shifting based on market dynamics.

How Does a Business Valuation Calculator Fit In?

A business valuation calculator offers a quick estimate based on your revenue, earnings, and industry. While helpful for initial planning, it’s not a substitute for a full valuation done by a professional.

Benefits of Using a Calculator:

• Quick, easy, and free

• Helps determine whether you're ready to sell

• A useful tool for tracking growth year over year

But when it’s time to get serious about selling, nothing replaces the precision of a broker-led valuation.

Why Work with Cox Business Brokers AZ?

Working with an experienced broker ensures more than just a number—it ensures a plan.

• We understand the local Arizona market

• We have a deep buyer network

• We help prepare your business for sale

• We maximize value and negotiate terms in your favor

Our goal isn’t just to tell you what your business is worth—it’s to help you get that value when you sell.

Get Expert Help from Cox Business Brokers AZ

If you’re considering listing your business for sale in Arizona or just want to understand its value—we're here to help. As experienced business brokerage professionals, Cox Business Brokers AZ provides expert valuation guidance, strategic sales planning, and access to a network of ready, qualified buyers.

Contact us today to schedule a confidential consultation and get a clearer picture of what your business is really worth.