You Built Something Real. Do You Know What It's Worth?
Every business owner eventually asks the same question: "What is my business actually worth?"
Maybe a broker told you a number. Maybe you Googled "business valuation calculator" and got a revenue multiple that didn't feel right. Maybe you've just been guessing — and you know you shouldn't be.
Here's the truth: there is no single "right" number. Your business is worth different things to different people, for different reasons. A buyer sees cash flow. A broker sees comps. An investor sees risk-adjusted returns.
That's why the smartest approach isn't to find one number — it's to find three, and see where they converge.
The Three Methods That Actually Matter
Professional valuators, PE firms, and M&A advisors don't rely on a single method. They triangulate — running multiple independent methods and looking for the range where they agree. XIT uses the same three methods they do.
Method 1: Intrinsic Value (DCF)
The question it answers: "What is this business truly worth based on the cash it will generate?"
This is the most rigorous method. It projects your free cash flow over the next five years, calculates a terminal value (what the business is worth beyond year five as an ongoing concern), and discounts everything back to today's dollars.
Think of it this way: if someone handed you a machine that would spit out cash every year for decades, how much would you pay for that machine today? That's what DCF calculates.
Two variants matter:
- FCFF (Free Cash Flow to Firm) — the total cash available to everyone: lenders and owners. This gives you the Enterprise Value.
- FCFE (Free Cash Flow to Equity) — the cash left for you, the owner, after paying the bank. This gives you the Equity Value — what your shares are actually worth.
When it matters most: Fundraising conversations, long-term hold decisions, and understanding the gap between what you owe and what you own.
Method 2: Market Comps (EV/EBITDA)
The question it answers: "What are businesses like mine actually selling for?"
This is the method brokers love — and for good reason. It takes your EBITDA (your business's core cash-generating power, before interest, taxes, depreciation, and amortization) and multiplies it by what similar businesses in your industry are trading at.
If landscaping businesses are selling for 4× EBITDA and your EBITDA is $500,000, your market value is roughly $2,000,000.
The catch: That multiple isn't fixed. It varies by industry, by growth rate, by how clean your books are, and by how dependent the business is on the owner. A 1× increase in your multiple on $500K EBITDA adds $500K to your exit price.
When it matters most: Exit negotiations (this is the language buyers speak), quick benchmarking, and understanding where you stand relative to your industry.
Method 3: The Derived Multiple (EV/EBITDA Fundamental)
The question it answers: "What does my intrinsic value imply about my market multiple?"
This method bridges the gap between your DCF value and what the market says. It takes your intrinsic valuations (FCFF and FCFE) and calculates an implied EBITDA multiple — essentially asking: "If my business is worth $X based on cash flows, what multiple does that imply?"
It then blends current and forward-looking valuations to give you a confidence-adjusted number.
When it matters most: Validating whether your market multiple is fair, understanding operational maturity, and showing buyers that your fundamentals support a premium multiple.
Why Three Is Better Than One
Imagine you're selling your house. Would you trust a single appraiser's number? Or would you feel better with three independent estimates?
The same logic applies to your business — except the stakes are much higher.
When all three methods converge on a similar range, you can be confident in that range. When they diverge, the gaps tell you something important:
- Intrinsic > Market Comps? Your business generates more cash flow than the market gives you credit for. There's an uplift opportunity.
- Market Comps > Intrinsic? The market is pricing in growth or strategic value that pure cash flow doesn't capture. Proceed with caution if you're buying.
- Derived Multiple > Industry Average? Your fundamentals justify a premium. Use this in negotiations.
The XIT Blended Valuation
XIT doesn't just show you three numbers and leave you to figure it out. It blends them into a single weighted answer — and the weights shift based on who you are.
A seller sees more weight on market comps, because that's what buyers actually pay. A fundraiser sees more weight on equity value, because that's what determines share price. An investor sees a balanced, risk-return-weighted blend.
Same business. Same three methods. Different perspective. Different answer — tailored to the decision you're actually making.
The Bottom Line
You don't need a $150,000 Quality of Earnings report to understand your business value. You need three independent methods, run on your actual financials, showing you a range you can trust.
That's what XIT does — in 10 minutes, for free.
Because you earned it. And you deserve to know what it's worth.
Ready to see your own numbers? [Get your free valuation](https://xitmatters.io/sign-up) — three methods, your perspective, 10 minutes.