Isn't That Rich Podcast

What’s Your Business Worth? A Conversation with CPA Ryan Masterson

If you're a business owner, chances are you've wondered at some point: What is my business really worth? Whether you're planning to sell, looking for a new partner, thinking about retirement, or just curious, understanding the true value of your business is a crucial part of being financially prepared.

In this episode of the Isn’t That Rich podcast, we sat down with Ryan Masterson, CPA with Kemper CPA Group, to walk us through the process of business valuation. With certifications in valuation analysis, fraud examination, and business valuation, Ryan has seen it all and shared some eye-opening insights on when, why, and how to get a business valuation done.

What is a Business Valuation, Really?

At its core, a business valuation is the process of determining the economic value of a business or company. It’s not just about the cash in the bank or the equipment on hand, it’s about understanding the enterprise as a whole. As Ryan explains, valuations go beyond just assets; they capture the future potential of your business and the cash flow it generates.

Two major factors drive a valuation: cash flow and risk. If your business generates solid, consistent cash flow and carries low risk, it's likely to command a higher value. But if revenue is unpredictable or relies heavily on one person or process, that risk gets priced in.

So... When Should You Get a Business Valuation?

The short answer? As soon as you're thinking about it.

Sure, many people wait until they're about to retire or sell but the earlier you start, the more time you have to improve your business’s value. Ideally, Ryan recommends starting 5 years before a transition. That gives you time to clean up financials, reduce risk, and make strategic changes that can pay off big when it's time to sell.

But it's not just about exit plans. Ryan shared several other times a valuation might be needed:

• When creating or updating operating agreements with business partners

• During estate planning, especially when the business is a major asset

• If you’re buying out a partner or bringing in a new one

• To determine key person insurance coverage

• If someone makes you an offer to buy and you want to evaluate if it’s fair

• To secure financing or attract investors

In short, a valuation is a helpful planning tool at almost any stage of business ownership.

Can You DIY a Business Valuation?

While it might be tempting to Google industry “multiples” or compare your business to others on sites like BizBuySell, Ryan advises against trying to calculate your own business’s value.

Why? Because most of us either overvalue what we’ve built (hello, emotional attachment) or underestimate its true worth. Either way, going it alone can lead to missed opportunities or leaving money on the table.

A professional valuation not only provides objectivity but also uses industry tools and databases you likely don’t have access to. Ryan's team, for example, compares your business to thousands of similar private company transactions to determine a fair and accurate market value.

Preparing to Sell? Here’s What You Should Be Doing Now

If you’re 3–5 years away from selling your business, Ryan suggests taking a good, hard look at how your company compares to industry benchmarks. Are your margins in line? Are you too reliant on one customer or one key employee? Are your processes documented so someone else could step in?

Buyers are looking for businesses that are profitable and transferable. That means systems, not just sweat. If all your knowledge is in your head or if the business can’t function without you, it will be seen as higher risk, and that means a lower valuation.

One powerful (and underrated) way to reduce risk? Document everything. From your hiring process to your weekly inventory routines, having operations written down boosts buyer confidence and makes your business easier to run even if you never sell.

How Long Does a Valuation Take?

It depends, but Ryan says the process typically takes 6–8 weeks. Much of that time is spent gathering documents and answering follow-up questions. Financials, tax returns, employee rosters, customer concentration, equipment lists, the more prepared you are, the smoother it goes.

And here’s a bonus: If you’re preparing to sell, the info you pull together for the valuation will also help with due diligence down the road.

What If the Results Surprise You?

Ryan says most business owners have a back-of-the-napkin idea of what their business is worth. Sometimes they’re close. Other times, they’re way off. But the valuation process itself helps manage those expectations.

By walking through financials, projections, and market comps together, Ryan helps owners understand why their business is valued a certain way. That education makes it easier to accept even if the number isn’t what they hoped.

And yes, sometimes people are pleasantly surprised too.

Start the Conversation

Whether you're planning a transition, exploring your options, or just want to know what your life's work is really worth, Ryan’s advice is simple: Start the conversation.

Talk to your CPA, attorney, financial advisor, or reach out to someone like Ryan himself. You don't have to commit to a full valuation right away, but having a conversation can help you make smarter decisions—now and down the road.

Connect with Ryan Masterson
Based in Evansville, IN and Mt. Carmel, IL
Visit www.kerca.com
Email Ryan at [email protected]