How the engagement works.
Three independent methods, every assumption documented, and a number built to survive the other side of the table.
Scope the purpose
A valuation for a raise, a partner buyout, and long-range planning are different exercises. The first call establishes what the number is for, who will challenge it, and what depth the situation actually needs. You'll know the scope and the fee before any work starts.
Normalize the earnings
Owner-led P&Ls carry owner compensation, one-time costs, and family payroll that a buyer or investor would strip out. I adjust to the earnings the business actually produces — usually the single biggest swing in the whole valuation.
Build the DCF
A cash-flow forecast built from your operating drivers, a discount rate built up and documented — the same discipline as my public-market work: cross-checked against institutional opinions and peer-group calculations — and a terminal value with its logic stated, not assumed.
Cross-check against the market
Comparable-company multiples and precedent transactions — actual sales of similar private businesses, drawn from deal databases — as independent second and third methods. Transaction prices typically sit above comparables, because a buyer taking control pays for it; that spread is information, not noise. When the number is for a sale or a buyout, transactions lead the cross-check. Where the methods disagree, I find out why — that gap is usually where the real insight about your business lives.
Deliver — and defend
A written summary, a sensitivity table showing exactly what moves the number, and a walkthrough. When the other side pushes back, every assumption has a documented answer.
Inside a working valuation model.
