Why it's a range and never a number

The short version

• Every estimate of value rests on judgment calls, so honest estimates come as a range.
• The earnings figure, the multiple, the buyer and the terms can all move the final price.
• Holding firm at the top of your range is the most common reason sales fail to close.
• A single number from anyone, including a buyer, is a starting point for a conversation.

Four reasons it is a range

The earnings figure is debatable. Your adjusted earnings depend on which expenses a buyer accepts as personal or one-time. A buyer's accountant may accept fewer than yours.

The multiple is a judgment. Comparable sales give a spread, not a point. Where your business sits in that spread is a matter of opinion.

Buyers differ. A buyer who already runs a similar company may pay more, because your business fits with theirs. Half of the investment bankers in Pepperdine's 2026 survey had seen these buyers pay a premium, most often 11 to 20 percent over other buyers.

Terms change the value. A price paid in full at closing is worth more to you than the same price paid over five years. Lesson 8.3 covers this.

A lender's view can set the ceiling

If your buyer borrows through the SBA, the lender orders its own independent valuation and will not lend more than it supports. Lesson 1.3 covers this.

What a gap costs

In Pepperdine's 2026 survey, investment bankers reported that about a third of sale processes they ran ended without a sale. The most common reason was a gap between what the seller wanted and what buyers would pay. The most common size of that gap was 11 to 20 percent.

Those were mostly larger sales than the ones most owners make. The lesson carries to smaller sales anyway. A modest difference in expectations is enough to stop a sale.

How to hold a range well

• Know your whole range, and the reasons behind each end of it.
• Decide in advance how far you can move, using your number from Lesson 3.1.
• Look at the terms, not only the price, before you say no.