Most Business Owners Don’t Know What Their Business Is Worth. Find Your Number Today.

  • YOUR BUSINESS, ASSESSED. YOUR VALUE, REVEALED.

CHARTWELLVALUE

Business Insights-Greater Value

Get Your Value

CHARTWELLVALUE

Business Insights Greater Value

The Survival Gap

Why Fewer Businesses Survive to Exit - and What Separates the Ones That Do

The average small business has been operating for 12 years (SBA Office of Advocacy, 2024). BLS cohort- survival data shows what happens from there.

Get Your Value
YOUR P&L​

Your P&L tells a story.​

Make sure it’s one a buyer believes.​

Clean, documented earnings are the foundation every valuation is built on.​

BOOK YOUR SNAPSHOT

READING YOUR P&L​

The p&L in 5 Numbers

Most owners carry a number in their head — but not where it comes from.​

1

Revenue​

What came in. Says nothing about worth on its own.​

2

COGS​
Cost of goods sold — what it costs to deliver what you sell.​

3

Gross Margin​

Revenue minus COGS — what each sale really earns.​

4

OpEx

Operating expenses, payoff — rent and ovearhead to run the business

5

Income

Gross margin minus OpEx —  what’s left, the number a buyer multiplies.

“Revenue tells a buyer how big you are. Earnings tell them what they’re buying.”​
FROM EARNINGS TO SDE​

SDE = Earnings + Add-backs​

WHAT THE P&L SHOWS​

Earnings​

WHAT THE OWNER TAKES OUT​

Add-backs​

TRUE OWNER BENEFIT​

SDE​

Common add-backs​

  • Owner’s salary, payroll taxes and benefits​
  • Personal expenses run through the business​
  • One-time or non-recurring costs​
  • Depreciation and amortization​
  • Interest on business debt​
Larger businesses are priced on adjusted EBITDA: the same idea, but a market-rate manager’s salary stays in as a cost.​

Purpose: why SDE matters​

  • Shows what the business truly pays its owner​
  • It’s the number a buyer multiplies to set the price​
  • Every documented add-back raises your value​

$10,000 add-back × 3 = $30,000​

A WORKED EXAMPLE​

From net income to SDE​

P&L line Amount Why a buyer adds it back
Net income (from your P&L) $180,000 The starting point
+ Owner’s salary and benefits $150,000 A new owner sets their own pay
+ Personal vehicle and phone $18,000 Owner perks, not operating costs
+ One-time legal settlement $25,000 Won’t recur under a new owner
+ Depreciation and interest $27,000 Non-cash and financing costs
= SDE $400,000 What the business truly pays its owner
$220,000 in documented add-backs turns $180,000 of profit into $400,000 of SDE. At a 3× multiple, that’s $660,000 of value. (Illustrative figures.)​
BEFORE A BUYER PAYS​

What a buyer checks​

Clean books aren’t about neatness. They’re what make your earnings believable.​

1

Three years of trends​
Steady or rising earnings beat one great year.​

2

Tax returns that match​
If the P&L and thereturns disagree, buyerstrust the returns.​

3

Market-rate owner pay​
Owner pay is reset to what a hired manager would cost.​

4

Documented add-backs​
If it can’t be verified, it doesn’t count.​
“Normalized earnings are the ones a buyer can verify. Everything else is negotiation.”​
P&L VS. ENTERPRISE VALUE​

Why your P&L isn’t the price​

P&L Enterprise Value
Looks at One past year What continues after you leave
Risk Not priced in Built into the multiple
Shows Profit only Durability, customers, transferability, clean books
Answers “How did we do?” “What is it worth?”
Used for Taxes and bookkeeping Selling, borrowing, exiting

The P&L isn’t wrong — it’s incomplete. Everything a buyer prices beyond profit lives in the multiple.​

WHERE VALUE SWINGS​

Same earnings. A very different price​

RUNS ON THE OWNER​
$500,000 SDE × 2​

$1,000,000​

RUNS ON SYSTEMS AND A TEAM​

$500,000 SDE × 4​

$2,000,000​

The P&L looks identical. The multiple is where the value swings.​
P&L tells you what happened.​
Enterprise Value tells you what it’s worth.​
Book your Snapshot​

chartwellvalue.com​

Three Eras of Risk

Years 0–5

Existence Risk
  • Undercapitalization and cash flow failure
  • No real market need for the product/service
  • Founder inexperience managing cash, hiring, operations

Years 5–15

Scaling Risk
  • Owner-dependency ceiling limits growth
  • Competitive and market shifts erode margin
  • No systems or second layer of leadership

Years 15–30+

Transition Risk
  • No succession plan in place
  • Enterprise value never structured to be sellable
  • Owner burnout; macro/industry disruption

The Real Story Behind The Drop

The fall from 34.7% at year 10 to 19.5% at year 20 isn’t mostly businesses going bankrupt. A large share are businesses that stayed profitable but became unsellable and unsucsessable – so they wind down when the owner is done, instead of transferring to a next owner. That is the exact gap between an income-producing business and one with real enterprise value.

Unsellable

Owner-dependent revenue – Relationships and sales run through the owner personally

No recurring/diversified revenue – One or two customers, or all project-based work

Messy financials – </span >Commingled expenses, no clean SDE trail

No documented systems – Everything lives in the owner’s head
Weak management team – Nobody can run day-to-day operations post-sale

Unsuccessable

No identified successor –Family, employee, or buyer relationship never developed
Undocumented knowledge – Pricing logic and relationships exist only in one head
Owner won’t let go – Decisions never delegated, so no one gets the reps
No financial runway – Business can’t support owner + successor overlap
One-personality culture – Employees and customers loyal to the person, not the business
These aren’t earnings problems – they’re structural problems. The EVO Score measures exactly this gap across the Four Owner Gaps: Knowledge, Valuation, Runway, and Build.

The Formula

The EVO Formula

One job: move an owner from an unmanaged business to an enterprise built to grow – on purpose, on a multiple, on your timeline.

SDE

Seller’s Discretionary Earnings. What the business actually
generates.

Multiple

The number the market pays for it – the part most owners never manage.

$

Enterprise Value.
Move the multiple, and the same earnings sell for more.

Today’s the day you start finding out what it’s worth.

Multiple (x) is the market's price

expressed practically as the number of times SDE a buyer will pay based on their confidence the business runs without you

1

Owner Independence

Can the business run for 90 days without you making a single decision?

___/10
2

Revenue Quality

What share of revenue is recurring, contracted, or highly repeatable?

___/10
3

Financial Clarity

Are your books clean, add-backs documented, and recast P&L trustworthy?

___/10
4

Customer Concentration

Does any single customer represent more than 15–20% of revenue?

___/10
5

Management Depth

Is there a layer of leadership below you with real authority and a track record?

___/10
6

Documented Systems

Are your core processes written down — SOPs, checklists, training material?

___/10
7

Growth Trajectory

Is revenue and margin trending up consistently over three years?

___/10
8

Competitive Position

Do you hold a defensible niche, brand, or pricing power?

___/10
9

Transition Readiness

If a buyer closed next month, is there a handoff plan?

___/10
TOTAL SCORE ___ / 90

7 Questions Every Owner Should Ask

About when and how to pursue Enterprise Value Optimization.

“Most owners never ask these questions until a buyer does. Ask them first.”

Not sure where to start?

evogap.com

1

When

How many years do I realistically have before I want – or need – to exit?

2

When

Do I know what my business is worth today, and what it could be worth?

3

How

Which of my value drivers is dragging my multiple down the most?

4

How

Could this business run, and sell, without me in the room?

5

When

Have I built a 5-year forecast showing what my enterprise value could become?

6

When / How

Am I revisiting this number every year, or just hoping it’s higher next time?

7

How

Do I know where to actually begin understanding what my business is worth?