Knowing Your Number: How Much You Need Before You Sell Your Business

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 745 words

Your number is the amount you need to receive from the sale, after debt, taxes and fees, to fund the life you want afterward, and you should know it before you decide when and how to sell. Most owners know roughly what they hope the company is worth. Far fewer have worked out what they actually need, or how the headline price turns into cash in their account. Without that clarity, it is hard to judge any offer.

Knowing your number turns exit planning from a vague wish into a plan with a target, and it tells you whether to sell soon, keep building or change the way the business runs.

Start with what you need

Work with a financial planner to translate your goals into a figure. Consider how you want to live, how long the money must last, what other assets and income you have, any debts, and what you want to leave to family or causes. Many owners also want to set aside money for a new venture or to help children.

Be realistic and specific. A goal written as a number, with the assumptions behind it, can be tested and revisited each year. A general hope to retire comfortably cannot. Include what owners often forget: health insurance, expenses the company used to cover, and the salary the business will no longer pay you.

Then understand what the business could bring

For a profitable company with $3 million to $100 million in revenue, value most often falls between three and seven times adjusted EBITDA, meaning earnings before interest, taxes, depreciation and amortization, adjusted for the owner's personal and one-time expenses. As an illustration only, a company with $2 million of adjusted EBITDA would, on that range, point to roughly $6 million to $14 million in value. Where a real company lands depends on its risk, growth, customer spread, management and records, and no range is a promise.

A professional business valuation gives you a grounded figure rather than a guess, and shows which factors are holding it back. If the figure surprises you, ask what drives it; the answer points to the work that would raise it.

The price is not the cash you keep

Between the headline price and your number sit several deductions and delays:

• Company debt, which is usually repaid from the proceeds at closing.
• Adjustments for working capital, the current assets minus current liabilities the buyer expects to remain in the business.
• Transaction costs, including advisory, legal and accounting fees.
• Taxes, which depend on the deal structure and your circumstances.
• Deferred amounts, such as a seller note or an earnout, which are paid later and may carry risk.

Our articles on enterprise value versus the cash you receive at closing and on calculating after-tax proceeds walk through each item. Your CPA should model the tax side for your situation. Ask for an estimate of net proceeds with every offer you consider.

If there is a gap, choose how to close it

If likely proceeds exceed your number, your decision is mostly about timing and the kind of buyer you want. If they fall short, you have several options. You can grow earnings for a few more years. You can reduce the risks that keep the multiple low, such as owner dependence or customer concentration, often the faster route. You can adjust your plans after the sale, or you can consider a partial sale, keeping a stake that may be worth more later. Each option costs something in time or risk, so compare them with your planner and advisor rather than defaulting to working longer.

Watch for signs that waiting is costing you: declining health or energy, loss of interest in the business, other priorities crowding it out, or reluctance to reinvest in growth. When those appear, the value of the company can start to slide, and the gap widens rather than narrows.

How MDR & Associates helps you test your number

In our free, confidential discovery meeting we review three years of financials and give you an opinion of value as a low-to-high range, then talk through what that range could mean in proceeds and what would move it. If the company is not ready, we say so. A principal of the firm is in every negotiation, so offers are pressed on the terms that affect your proceeds, not just the headline price. A quick first step is our free valuation snapshot, which shows where you stand today.

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Questions owners ask next

Should I tell buyers what my number is?

No. Your number is a private planning figure, not an asking price. Buyers should compete on the value of the company. Sharing what you need tends to anchor offers near that figure, even when the business could bring more in a competitive process.

How often should I update my number?

Review it at least once a year with your financial planner, and whenever something significant changes, such as your health, family circumstances, a large change in company earnings or a shift in how you want to spend your time after the sale.