What is enterprise value?
Enterprise value is what a business is worth as a whole: the price a buyer would pay for the company, debt included and cash excluded. For a service business it usually comes down to two numbers: earnings, and the multiple a buyer applies to them.
Why it matters
Two plumbing companies with the same profit can sell for very different prices. The one that runs on documented systems and clean numbers gets the higher multiple. The one that runs on the owner's memory gets discounted, or doesn't sell at all.
You don't need to be selling to care. The same things that raise the multiple make the business easier to run today.
The multiple is where owner dependence shows up
Toggle to compare how a buyer prices the same earnings.
The levers buyers price
Owner dependence
Can it run without you? Every process that lives in your head is a liability on the term sheet.Data you can trust
Clean job, customer, and financial records let a buyer verify the story. Messy data gets discounted.Recurring, predictable revenue
Service agreements, repeat customers, and a lead engine you own beat one-off jobs from a directory.Documented systems
SOPs, mapped processes, and a connected stack that a new operator can pick up on day one.Four moves that change the number
Related terms
The vocabulary around enterprise value, defined the same way: one question, one straight answer.
How much of the business still runs through you?
Tell us where your week goes. We'll score the dependence, show what a buyer would discount for, and name the first thing to take off your desk.How this check works →Straight answers
It varies by trade, size, and how the business runs. What's consistent is the direction: the less the company depends on its owner, and the cleaner its numbers, the higher the multiple.
Digital Value Creation
The service built to raise the multiple: map, clean, architect.Explore the flagship →Get a free consultation
Find time with our team to talk through where you want to take the business, and how we can help you get there. We'll point out what's worth fixing first, even if it isn't us who fixes it.