Know what your business is worth.
And why.
Your business may be your largest financial asset.
Yet many owners don’t have a clear understanding of what it’s worth — or what is actually driving that value.
H2 Advisors provides Business Valuation services for privately held companies, helping business owners, attorneys, advisors, and other stakeholders understand value across a wide range of financial, strategic, tax, transaction, and legal situations.
Our Business Valuation professionals are Certified Valuation Analysts (CVAs) through the National Association of Certified Valuators and Analysts (NACVA).
We don’t just calculate a number.
We help you understand how the value was determined, what is driving it, and what it means for the decision in front of you.
Value depends on the question you’re trying to answer.
There isn’t one universal answer to what a business is “worth.”
The appropriate standard of value, methodology, assumptions, valuation date, and scope of analysis can depend heavily on why the valuation is being performed.
A valuation for estate and gift tax planning may involve different considerations than an analysis performed in connection with a potential sale.
A shareholder dispute may raise issues that aren’t relevant to an internal planning valuation.
A divorce, partner buyout, acquisition, business damages matter, or corporate restructuring may each require a different perspective.
That’s why every H2 Business Valuation engagement starts with the same question:
- What decision is this valuation intended to support?
From there, we determine the appropriate scope, valuation framework, and analysis for the circumstances.
More often than most business owners realize.
Selling a business may be the most obvious reason to understand its value.
It’s far from the only one.
Business Valuation can become important at nearly every stage of business ownership.
Understand value before you enter the market. Before pursuing a sale, owners need a realistic understanding of how the business may be evaluated and what factors could influence value. Business Valuation can help establish expectations, identify important value drivers and risks, and inform decisions around timing and transaction strategy.
Understand what you’re buying before determining what to pay. Buyers can use Business Valuation to evaluate acquisition opportunities, analyze financial performance, assess assumptions, and develop an informed perspective on value before committing capital.
Establish a financial framework for an ownership transition. When one owner buys another owner’s interest, determining value can quickly become one of the most important — and potentially contentious — parts of the transaction. An independent Business Valuation can provide a structured financial framework for those discussions.
Plan for ownership changes before they happen. Buy-sell agreements often establish what happens when an owner retires, dies, becomes disabled, or otherwise leaves the business. Business Valuation can help establish or periodically update the value used within that framework and help owners evaluate whether an existing valuation mechanism continues to make sense.
When owners disagree, value often becomes central to the dispute. Disagreements among shareholders, members, or partners may involve questions about the value of an ownership interest, economic damages, distributions, transactions, or an owner’s exit from the company. H2 can provide Business Valuation and related financial analysis to support attorneys and their clients in these matters.
A privately held business can be one of the most complex assets in a divorce. Determining the value of a business interest may require analysis of normalized earnings, owner compensation, ownership rights, business-specific risks, and other financial considerations. H2 provides Business Valuation and financial analysis in connection with marital dissolution matters and can work alongside legal counsel throughout the process.
Business ownership is often a significant part of an owner’s estate. Business Valuation may be needed when ownership interests are transferred through gifts, trusts, estate planning strategies, or following an owner’s death. These engagements can involve valuation of controlling or noncontrolling interests and consideration of the specific rights and characteristics associated with the interest being valued. H2 works with estate planning attorneys, tax advisors, and other professionals as part of the broader planning process.
Know the value before planning the transition. Whether ownership will eventually transfer to family members, employees, management, or an outside buyer, understanding value provides an important starting point for succession planning. It can also help owners understand the financial implications of different transition alternatives.
Changing the structure can create valuation questions. Recapitalizations, ownership transfers, reorganizations, equity issuances, redemptions, and other restructurings may require an understanding of the value of the company or specific ownership interests. H2 can provide Business Valuation analysis to support the financial and tax considerations surrounding these transactions.
Sometimes the question isn’t what the business is worth — it’s what was lost. Commercial disputes can involve lost profits, diminution in business value, business interruption, breach of contract, wrongful conduct, or other alleged economic damages. These matters require financial analysis focused on the economic impact of the event and the specific facts and circumstances of the dispute.
Business Valuation can arise in a wide range of litigation matters, including:
- Shareholder disputes
- Partnership disputes
- Marital dissolution
- Business damages
- Lost profits
- Breach of contract
- Ownership disputes
- Buyout disputes
- Other commercial litigation
H2 can work alongside attorneys throughout the process, from preliminary financial analysis through formal Business Valuation and litigation support.
Lenders, investors, or other parties may request valuation analysis in connection with certain financing, ownership, or capital transactions. Business Valuation can also help ownership evaluate financing alternatives and understand how changes to the capital structure may affect the economics of the business and its owners.
You don’t need to be selling your business to care what it’s worth. A periodic Business Valuation can establish a baseline for owners who want to intentionally build enterprise value over time. Understanding the factors influencing value can help management identify where risk exists, where opportunities may exist, and how strategic decisions could affect the long-term value of the company.
You can’t intentionally build value if you don’t understand what is creating it.
The right level of analysis depends on what you need it for.
Not every valuation requires the same scope of work.
An owner trying to understand the potential value of a business for internal planning may need something very different from an attorney using a valuation in litigation or an estate planning team addressing a gift or ownership transfer.
Under NACVA professional standards, Business Valuation engagements generally fall into two categories: a Valuation Engagement, which results in a Conclusion of Value, and a Calculation Engagement, which results in a Calculated Value.
A comprehensive analysis resulting in a Conclusion of Value.
In a Valuation Engagement, the valuation analyst determines the valuation approaches and methods considered appropriate based on the purpose of the valuation and the facts and circumstances of the business.
The analyst considers the company’s financial performance, operations, industry, economic environment, ownership characteristics, risks, and other relevant factors before developing a Conclusion of Value.
A Valuation Engagement may be appropriate for matters involving:
- Estate and gift tax planning
- Divorce and marital dissolution
- Shareholder and partner disputes
- Litigation
- Ownership transfers
- Buy-sell matters
- Certain corporate restructurings
- Other situations requiring a more comprehensive valuation analysis
A defined scope resulting in a Calculated Value.
In a Calculation Engagement, the valuation analyst and client agree on the valuation approaches, methods, and extent of procedures to be performed.
Because the scope is more defined, a Calculation Engagement can be appropriate when the purpose doesn’t require a full Valuation Engagement.
Potential uses may include:
- Internal business planning
- Preliminary M&A discussions
- Early-stage succession planning
- Preliminary partner buyout discussions
- Strategic planning
- Periodic value benchmarking
- Evaluating alternatives before undertaking a full Valuation Engagement
A Calculation Engagement isn’t simply a shorter version of a Valuation Engagement.
It is a different engagement with an agreed-upon scope and a different type of value determination.
That depends on why you need the valuation, who will use it, and the circumstances surrounding the engagement.
Some legal, tax, transaction, or third-party matters may call for a comprehensive Valuation Engagement. Other internal or preliminary planning situations may be well suited for a Calculation Engagement.
We start with the purpose — then determine the appropriate scope.
A valuation is an analysis. Not a report.
The report is how we communicate the work.
It isn’t the work itself.
Understanding a privately held business requires professional judgment.
It requires understanding how the company makes money, what drives its margins, where risk exists, how dependent it is on ownership or key customers, what differentiates it from competitors, and what economic benefits an owner of the business is actually acquiring.
We analyze financial performance, normalize earnings where appropriate, research relevant market and industry information, evaluate company-specific risks and opportunities, and determine which valuation approaches and methods are appropriate for the engagement.
Technology, databases, and valuation software can support that analysis.
They don’t replace professional judgment.
Every valuation conclusion should reflect the specific company being valued — not simply the output of a standardized model.
There is no single formula for business value.
Professional Business Valuation isn’t simply multiplying EBITDA by a number.
The appropriate methodology depends on the business, the purpose of the valuation, the applicable standard of value, the ownership interest being valued, and the facts and circumstances of the engagement.
Valuation professionals generally consider three primary approaches.
Value based on the economic benefits the business is expected to generate.
The Income Approach considers the company’s expected future economic performance and the risk associated with generating those returns.
Depending on the circumstances, methods may include:
- Capitalization of earnings or cash flow
- Discounted cash flow analysis
The analysis may consider historical performance, expected growth, margins, working capital requirements, capital expenditures, and the risks associated with achieving expected results.
Value informed by how similar businesses or ownership interests are priced in the market.
The Market Approach considers available market evidence involving comparable companies or transactions.
Depending on the business and available data, this may include:
- Guideline public company analysis
- Guideline transaction analysis
- Transaction multiples
- Other relevant market data
The analysis requires more than finding an industry multiple online.
Differences in size, growth, profitability, concentration, management, risk, and other company-specific characteristics can materially affect comparability.
Value based on the underlying assets and liabilities of the business.
The Asset Approach considers the value of a company’s assets less its liabilities, with adjustments made where appropriate.
This approach can be particularly relevant for certain:
- Asset-intensive businesses
- Holding companies
- Real estate entities
- Investment entities
- Businesses with significant tangible assets
- Companies whose asset values may not be reflected by current earnings
Not every approach is equally relevant in every valuation.
Depending on the circumstances, one methodology may receive greater consideration than another, or multiple methods may be considered together.
The objective isn’t to force the business into a formula. It’s to apply the valuation methods that make sense for the specific company and purpose of the engagement.
Understand the number. Then understand what’s behind it.
A Business Valuation can tell you more than what a company may be worth.
It can reveal the financial and operational characteristics influencing that value.
Depending on the business, important value drivers may include:
- Revenue growth and historical performance
- Earnings and cash flow
- Gross and operating margins
- Recurring or repeat revenue
- Customer concentration
- Supplier concentration
- Owner dependency
- Management depth
- Employee concentration and retention
- Competitive position
- Market and industry outlook
- Revenue visibility and backlog
- Capital expenditure requirements
- Working capital requirements
- Scalability
- Intellectual property
- Contracts and customer relationships
- Geographic concentration
- Financial reporting quality
- Transferability of the business
Two companies with identical EBITDA can have very different values.
A business with diversified customers, recurring revenue, strong management, documented processes, and limited owner dependency may present a very different risk profile from a business producing the same earnings but heavily dependent on one customer or one owner.
Value isn’t determined by earnings alone. It’s determined by the earnings, the risks surrounding them, and the expected economic benefits of owning the business.
Sometimes the question isn’t what the company is worth.
It’s what a specific ownership interest is worth.
Not every Business Valuation involves 100% of a company.
Estate and gift planning, shareholder disputes, partner buyouts, divorce, restructurings, and other situations may require the valuation of a specific ownership interest.
Depending on the purpose of the engagement and applicable standard of value, the analysis may need to consider factors such as:
- Percentage ownership
- Voting rights
- Distribution rights
- Control provisions
- Transfer restrictions
- Buy-sell agreements
- Marketability
- Other rights and restrictions associated with the interest
A 20% ownership interest is not necessarily worth exactly 20% of the value of the entire company.
The rights attached to the ownership interest matter.
A valuation you can understand.
Business Valuation involves technical financial analysis, but the final result should still make sense to the people using it.
Our process generally includes:
- 01
Understand why the valuation is needed, the interest being valued, the applicable valuation date, the intended use of the analysis, and the appropriate standard of value.
- 02
Review the company’s history, operations, ownership, industry, competitive environment, and financial performance.
- 03
Evaluate historical results, normalize financial performance where appropriate, and understand the economic characteristics of the business.
- 04
Consider relevant industry, economic, market, and transaction information and how it relates to the specific company being valued.
- 05
Consider the Income, Market, and Asset Approaches and apply the methods appropriate to the engagement.
- 06
Evaluate the indications of value in the context of the company, the ownership interest, and the purpose of the valuation.
- 07
Walk you through the analysis, significant assumptions, methodologies, and factors influencing the conclusion.
You should understand more about your business after the valuation than you did before it.
Business Valuation with
a broader perspective.
Certified Valuation Analysts.
H2’s Business Valuation professionals hold the Certified Valuation Analyst (CVA) credential through the National Association of Certified Valuators and Analysts (NACVA). Our valuation engagements are performed in accordance with the professional standards applicable to the engagement and supported by analysis of the specific business, ownership interest, valuation purpose, and facts and circumstances involved.
Your business doesn’t fit into a template. Neither should your valuation.
Every engagement starts with understanding the business behind the numbers. We evaluate financial performance, operations, industry conditions, company-specific risks, ownership characteristics, and other relevant factors rather than relying on a standardized report process to determine value.
We understand the company behind the spreadsheet.
Financial models matter, but so do customers, employees, operations, competitive position, management, and risk. We evaluate the business as a business — not simply as a set of historical financial statements.
We see how businesses are evaluated in the real world.
H2’s M&A experience gives our valuation professionals exposure to buyers, transactions, deal structures, financial diligence, and the factors that can influence how privately held businesses are evaluated in the market.
Financial analysis for situations where the answer may be challenged.
Valuation disputes require careful analysis, documentation, and the ability to clearly explain financial conclusions. H2 can work alongside counsel in shareholder disputes, divorce, business damages matters, and other commercial disputes.
Tax + Fractional CFO + Business Valuation + M&A
A valuation often sits in the middle of a larger decision. Our broader capabilities allow the valuation team to coordinate with H2’s tax, financial advisory, and M&A professionals when the circumstances call for it.
Understand the analysis — not just the conclusion.
We explain significant assumptions, methodologies, and value drivers in straightforward language so you understand how the analysis fits the decision you’re making.
Understand value. Then decide what to do with it.
H2 brings Accounting, Tax, Fractional CFO, Business Valuation, and M&A Advisory together — connecting the financial decisions you make today with the long-term value you’re building.
Business Valuation sits at an important point in that progression.
It can establish where you are today, help identify what is influencing value, and provide information that supports decisions about growth, ownership, succession, or a future transaction.
Accounting + Tax
Build the financial foundation.
Fractional CFO
Turn information into action.
Business Valuation
Understand and build value.
M&A Advisory
Realize what you’ve built.
One firm. Every stage of the business.
Answers to the questions
we hear most.
There are many reasons to obtain a Business Valuation beyond selling a company. Common situations include M&A transactions, acquisitions, partner or shareholder buyouts, buy-sell agreements, estate and gift planning, divorce, succession planning, ownership restructuring, shareholder disputes, business damages, lost profits matters, commercial litigation, certain financing transactions, and internal strategic planning. The appropriate scope and methodology depend on why the valuation is being performed.
A Valuation Engagement involves a comprehensive valuation analysis in which the valuation analyst determines the approaches and methods considered appropriate and develops a Conclusion of Value. In a Calculation Engagement, the valuation analyst and client agree on the valuation approaches, methods, and extent of procedures to be performed, resulting in a Calculated Value. The appropriate engagement depends on the purpose, intended use, and circumstances surrounding the valuation.
There is no single formula. Valuation professionals generally consider three primary approaches: the Income Approach, Market Approach, and Asset Approach. Within those approaches are different valuation methods. The methods considered and the weight placed on each depend on the characteristics of the business and the purpose of the valuation.
No. Market multiples can provide useful evidence in certain valuations, but applying a generic industry multiple to EBITDA doesn’t capture all of the factors that can affect business value. Growth, margins, customer concentration, management depth, owner dependency, recurring revenue, capital requirements, industry conditions, company-specific risk, and many other factors may influence value.
They’re related, but they’re not necessarily the same question. A Business Valuation applies defined valuation assumptions, methodologies, a standard of value, and a specific valuation date based on the purpose of the engagement. The price a buyer might ultimately pay in an M&A transaction can also be influenced by strategic considerations, competition among buyers, transaction structure, synergies, financing conditions, working capital, negotiations, and other deal-specific factors. H2’s Business Valuation and M&A capabilities allow us to help owners understand that distinction.
Yes. Certain engagements involve a specific ownership interest rather than 100% of the company. Depending on the purpose of the valuation and applicable standard of value, the analysis may consider voting rights, control, distribution rights, transferability, marketability, contractual restrictions, and other characteristics of the interest being valued.
Yes. Business Valuation is often needed when privately held business interests are transferred through gifts, trusts, estate planning strategies, or following an owner’s death. H2 can work alongside the client’s tax professionals, estate planning attorneys, and other advisors as part of the broader planning process.
Yes. H2 provides Business Valuation and related financial analysis in connection with marital dissolution, shareholder and partnership disputes, partner buyouts, business damages, and other commercial disputes. We can work directly with legal counsel throughout the engagement.
Yes. Understanding value before entering the M&A process can help an owner establish realistic expectations, identify significant value drivers and risks, and evaluate potential transaction alternatives. If an owner ultimately decides to pursue a sale, H2’s M&A Advisory team can separately assist with the transaction process.
A Business Valuation can help identify financial and operational factors that may be influencing value, including customer concentration, margins, recurring revenue, owner dependency, management depth, working capital requirements, growth, and other company-specific risks and opportunities. For owners focused on building value over time, H2’s Fractional CFO team can help translate those observations into financial planning, performance management, and strategic initiatives.
The timeline depends on the purpose and complexity of the engagement, the availability of financial and operational information, the number of entities or ownership interests involved, and the level of analysis required. We establish the expected scope, information requirements, timeline, and fee at the beginning of the engagement.