Sarah had relied on her CPA for years — taxes, bookkeeping, general business advice. So when it came time to estimate the value of her company before a sale, asking him felt natural. He applied a simple two-times-earnings multiple and came back with $500,000. It sounded reasonable. She had no benchmark to say otherwise.
But a simple multiple doesn't account for the full picture — customer base, brand equity, goodwill, equipment, or how the business compares to industry benchmarks. Sarah was preparing to make the biggest financial decision of her life based on a back-of-the-napkin number from someone whose expertise was in taxes, not business value.
The deeper problem wasn't the number itself. It was that Sarah had no way to know it was wrong. Without a professional estimate built for this exact purpose, she was one signature away from leaving nearly half a million dollars on the table — and building a retirement plan around a figure that didn't reflect what she'd actually built.
