The question I am asked most often is some version of what is my company worth. The honest answer is that it depends on who is asking, what they want to do with it and how the deal is structured. That sounds evasive. It is the opposite. It means the owner has more control over price than most owners believe.
Valuation is not a fact waiting to be discovered. It is a decision made by two parties who see the same company differently. The owner who understands this negotiates well. The owner who waits for the market to tell her what the business is worth usually receives an answer she does not like, and no framework for responding to it.
Know your own number first
Before any external process, an owner should have three figures written down. The value below which she would rather keep the company. The value at which the trade is clearly good. And the value that would make her suspicious of the buyer's intentions. Owners without these numbers negotiate against the last offer they received rather than against their own judgment.
The bottom figure is the important one. It is not about greed. It is about knowing that the company, kept and run well, has a value to the owner that a buyer must exceed. If that value is honestly calculated, including the owner's time and the concentration of risk, the floor is often lower than pride suggests and higher than the first offer.
Headline and substance
Two offers with the same headline can differ by a third in real terms. Earn outs that depend on targets the buyer controls. Vendor loans at generous rates. Working capital adjustments that nobody has estimated. Reinvestment of proceeds into the acquiring structure at a valuation nobody has questioned. Each of these moves value from the owner to the buyer while leaving the headline intact.
A useful discipline is to translate every offer into cash on completion, cash that is probable, and cash that is possible, and to compare offers on the first two only. Buyers who object to this are telling you where the value in their offer actually sits.
The multiple is a shorthand, not an argument
Owners hear that companies in their sector trade at a certain multiple and conclude that theirs should too. Buyers use the same shorthand in the other direction. Both are negotiating with a rumour. What a disciplined buyer actually does is model the cash the company will generate under their ownership, the capital it will need, and the return they require. The multiple falls out of that calculation. It does not drive it.
An owner who has done the same calculation, from the buyer's side, knows what the buyer can afford to pay. That is worth more than any comparable transaction.
Discipline is symmetrical
I spend most of my working life on the other side of this table, looking at companies to invest in. The discipline that protects an investor is the same discipline that protects an owner: know what the asset is worth to you, understand the terms as well as the price, and be genuinely willing to walk away. The best outcomes I have seen were between parties who both had a number, both knew why, and were both prepared not to transact. The worst were between a seller who needed to sell and a buyer who knew it.
A useful first step
Write down the three figures. Then, for the most likely buyer type, build the simplest version of their model: what they would earn from your company over five years, what it would cost them to own it, and what return they expect. The gap between your floor and their ceiling is the negotiation. Everything else is noise.