A business broker's opinion of value (BOV) is a written estimate of what an operating business would most likely sell for in today's market, prepared by a business broker from the company's real financials, add-backs, and comparable sales. It is not a certified appraisal and is not meant for court, the IRS, or a lender. It is the number a broker would take your company to market at, and I prepare it for owners at no fee, with no listing agreement and no obligation.
What is a broker's opinion of value for a business?
It is the same work I do before I agree to represent a company for sale: normalize the earnings, read the quality of those earnings, apply what buyers in that industry and at that size are paying right now, and put a range in writing with the reasoning behind it. Brokers sometimes call the result the most probable selling price. It is an opinion grounded in the market, not a formula.
If you have heard the term in commercial real estate, it is the same idea applied to a different asset. A real estate BOV estimates what a building would sell for from rent and cap rates; a business BOV estimates what the operating company would sell for from earnings and buyer demand. When a business owns its building, the two are valued separately and then considered together.
Owners ask for one for four reasons: they are thinking about selling in the next few years and want to know where they stand, a buyer or competitor has approached them and they need a reference point, they are planning with a partner or a spouse, or they simply want to know. All four are good reasons.
How does it compare to an appraisal or a calculator?
A broker's opinion of value sits between a web calculator and a certified appraisal, and it answers a different question than either. The calculator gives you a starting range in two minutes. The appraisal gives you a legally defensible number for a specific purpose. The broker's opinion tells you what a buyer would actually pay.
| Online calculator | Broker's opinion of value | Certified appraisal | |
|---|---|---|---|
| Prepared by | A formula | A business broker | A credentialed appraiser (CVA, ABV, ASA) |
| Based on | Your inputs and an industry average | Your actual financials, add-backs, and current buyer behavior | Full financial analysis to professional standards (USPAP) |
| Output | A rough range | A written range with reasoning and the factors moving it | A formal report, often 40+ pages |
| Time | Two minutes | About a week | Three to six weeks |
| Cost | Free | Free | Typically several thousand dollars |
| Use it for | A first look | Planning, deciding whether to sell, responding to an approach, setting a realistic price | Tax, estate, divorce, partner buyouts, SBA lending, litigation |
| Legal standing | None | None; a market opinion | Defensible to courts and the IRS |
If you need a number for a court, the IRS, a lender, or a partnership agreement, get the appraisal; I will tell you so and can point you to appraisers I trust. If you need to know what your business would bring and why, the broker's opinion is the right tool.
Why does an owner over about $5 million in revenue need this instead of a calculator?
Because at that size the buyers change, and so does the math. A business under a few million in revenue usually sells to an individual or a small competitor who prices on seller's discretionary earnings. Above roughly $5 million, or whenever a management team runs the day to day, the buyers are private equity platforms and strategic acquirers, and they price on adjusted EBITDA.
Those buyers do not start from an industry multiple. They start from your add-backs and decide which ones they believe. They set a working-capital target and adjust the price for it at closing. They discount for customer concentration and pay up for contracts that renew. They offer structure, an earnout, a seller note, or rollover equity, that can move what you net by more than the headline multiple does. A calculator cannot see any of that. A broker who has sat across from those buyers can.
How is a broker's opinion of value prepared?
Six steps, and the first one protects you. The written range usually comes back within a week of receiving your financials.
Sign the NDA, then send the financials
Within one business day of your request I send you a non-disclosure agreement, signed by me, with no obligation attached to it. Nothing is shared until it is in place. Then you send the three items below.
Normalize the earnings
I rebuild your profit and loss into the number a buyer prices on: seller's discretionary earnings for an owner-run company, adjusted EBITDA for a management-run one. Owner compensation, personal expenses, one-time items, and related-party rent are each added back or taken out, and I note which add-backs a buyer's accountant will accept without argument and which they will push on.
Read the quality of the earnings
Trend over three years, gross margin, customer and supplier concentration, recurring versus project revenue, backlog or contracts, working-capital needs, and how much of the business runs on you. These move the multiple more than the industry average does.
Apply current buyer behavior
I use the multiples buyers are actually paying in your industry and at your size right now, from closed transactions and active mandates, not a published table. A $600K SDE shop and a $3M EBITDA company in the same trade sell to different buyers at different multiples.
Test the deal structure
Price is only part of what you receive. I show how an all-cash offer, a seller note, an earnout, or rollover equity would change the number you would net, and which structures are common for a business like yours.
Write it up and walk through it
You receive a written range with the reasoning, the factors moving your number up or down, and what would change it. Then we spend thirty minutes on a call going through it. What you do with it after that is up to you.
What do you receive?
- A written range of most probable selling price, with the reasoning behind it
- The normalized earnings figure buyers would price on, and how I got there
- The factors moving your number up or down, in plain language
- How common deal structures for a business like yours would change what you net
- A thirty-minute call to walk through it
No fee, no listing agreement, no obligation. I reply personally within one business day, starting with a signed NDA.
What do I need from you?
- Last three years of financial statements (profit & loss and balance sheet), or the business tax returns for those years
- Year-to-date financials for the current year
- A list of owner compensation and add-backs: owner salary and benefits, personal expenses run through the business, and any one-time items
This takes most owners about twenty minutes to pull together. You send nothing until you have a signed non-disclosure agreement from me, and after that your financials are seen by me and no one else.
Why is it free, and who is it for?
I do this at no charge for a plain reason. Some of the owners I prepare an opinion of value for decide to sell within a few years, and I would like to be the first call when they do. Most do not sell, and that is a perfectly good outcome. Knowing the number is useful whether you ever use it, and an owner who knows where they stand makes better decisions about hiring, debt, growth, and timing.
- Privately held companies, roughly $1 million to $50 million in revenue
- Owners thinking about a sale in the next one to five years
- Owners who have been approached by a buyer or competitor
- Partners, families, and advisors who need a realistic reference point
- A number for a court, the IRS, a lender, or a partnership buyout: you need a certified appraisal
- Businesses under about $1 million in revenue: a quick online estimate will serve you well
- Startups or pre-revenue companies: valuation works differently and I am not the right advisor
If you are in the second group, I will say so and point you in the right direction. For how a sale runs once you do decide, see how I sell a business; for who is buying in your trade right now, the industry reports.
Questions owners ask about a broker's opinion of value
What is a business broker's opinion of value?
A business broker's opinion of value (BOV) is a written estimate of what an operating business would most likely sell for in the current market, prepared by a business broker from the company's actual financials, add-backs, and comparable sales. It is the number a broker would take a business to market at, and it is sometimes called the most probable selling price (MPSP).
How is a broker's opinion of value different from a certified business appraisal?
A certified appraisal is prepared by a credentialed appraiser (CVA, ABV, ASA) to professional standards such as USPAP, is defensible in court and to the IRS, and typically costs several thousand dollars and takes weeks. A broker's opinion of value is a market opinion rather than a legal document: faster, usually free, and focused on what a buyer would actually pay today. You need an appraisal for tax, divorce, partner disputes, estate planning, or SBA lending. You need a BOV to know where you stand and decide what to do next.
Is a broker's opinion of value the same as a BOV in commercial real estate?
Same idea, different asset. In commercial real estate a BOV estimates what a building would sell for. For a business, it estimates what the operating company would sell for, based on earnings rather than rent rolls. If the business owns its real estate, the two are usually valued separately and then considered together.
What does it cost?
Nothing. There is no fee, no listing agreement, and no obligation. I prepare it the same way I would before taking a company to market, and I do it at no charge because some of the owners I prepare it for decide to sell within a few years and I would like to be the first call when they do. Most do not sell, and that is a perfectly good outcome.
Do I have to list my business with you?
No. The opinion of value is yours to keep. Some owners use it to plan, some to decide not to sell, some to negotiate with a partner or a buyer who approached them directly. None of that requires working with me.
How long does it take?
You will have a signed non-disclosure agreement from me within one business day of your request. Once your financials arrive, the written range usually comes back within a week, followed by a thirty-minute call to walk through it. Getting the documents together takes most owners about twenty minutes.
How accurate is it?
It is a range, not a single number, and it is built from your real earnings and current buyer behavior, which makes it far more reliable than any web calculator. It is not a guarantee of price. The final figure depends on who shows up to buy and how the deal is structured, and the written reasoning tells you which factors are moving your number and in which direction.
What do you need from me?
Three things: the last three years of financial statements (profit and loss and balance sheet) or the business tax returns for those years, year-to-date financials for the current year, and a list of owner compensation and add-backs such as owner salary and benefits, personal expenses run through the business, and one-time items.
Is it confidential?
Yes. The first thing I send after you request an opinion of value is a non-disclosure agreement, signed by me, with no obligation attached. You send nothing until it is in place. After that, your financials are seen by me and no one else, are not stored in any shared system, and are not used for anything other than preparing your opinion of value.
Who should not request one?
Owners of businesses under roughly $1 million in revenue are usually better served by a quick online estimate, and owners who need a number for a court, the IRS, a lender, or a partnership buyout need a certified appraisal, not a broker's opinion. I will tell you if that is your situation.
I represent owners of privately held companies in confidential sales, and I prepare every opinion of value myself. Accredited Business Intermediary (ABI), MBA, member of the International Business Brokers Association. Full background.
Request a written opinion of value
Send your details below. Within one business day I will reply personally with a signed non-disclosure agreement and a secure way to share your financials once it is in place. No fee, no listing agreement, no obligation. If you are not planning to sell and just want to know the number, say so; that is a perfectly good reason to ask.
