The Broker Opinion of Value

A Broker Opinion of Value combines your business's adjusted earnings with market evidence — what comparable privately held businesses in Texas have actually sold for — and a broker's judgment about the risk factors specific to your company: owner dependence, customer concentration, the quality of your records, the industry you're in. Stefan Lagmark has been a Member of the Institute of Business Appraisers since 2004, and that background shapes how we build the number, though the Opinion of Value itself is not a certified appraisal.

We produce it with no fee and no obligation to list, on the understanding that a number without documents behind it is not useful to anyone. For the underlying valuation drivers, see what is my business worth.

We start with your adjusted earnings — Seller's Discretionary Earnings or EBITDA, depending on the size of the company — and layer in the risk factors that move a multiple up or down: how much the business depends on you personally, how concentrated the customer base is, whether revenue is contractual or repeat, and how financeable the earnings will look to a bank. We also review what comparable Texas businesses in your size range and industry have sold for recently.

A Broker Opinion of Value is not a certified business appraisal, and it does not follow the formal appraisal standards that a court, the IRS, or a fiduciary process requires. It is also not a guarantee of what your business will sell for — the final price depends on the specific buyer, financing conditions, and negotiation, none of which can be predicted with certainty months in advance.

An Opinion of Value tells you where to start a conversation with the market. It does not tell you where that conversation will end.

If you need a valuation for a divorce, an estate, a gift, a shareholder dispute or an ESOP, you need a certified appraisal from a credentialed appraiser, produced to formal standards and typically defensible in a legal proceeding. We will tell you plainly when your situation calls for that instead of a Broker Opinion of Value, and in those cases your attorney and CPA should be involved from the outset — that is not a role we fill.

To produce a usable Opinion of Value, we ask for three years of business tax returns, current internal financial statements including the most recent interim period, and any recasts or add-backs that apply to how the business is actually run. If your books need cleanup before any of this is meaningful, that is common, and it is covered on preparing your business for sale and how buyers read your P&L.

Businesses under $100,000 in Seller's Discretionary Earnings, or with less than five years of documented history, are harder to value with confidence and harder to sell and finance. We would rather tell you that up front than produce a number that will not hold up with a buyer's lender.