What is the fair market value of my business?

You want a value that will stand up to scrutiny from buyers, lenders, lawyers, or tax authorities. You are not looking for a negotiating position. You are looking for a supportable number.

Fair market value is established by applying the 25 Factors Affecting Business Valuation under the assumption of a willing buyer and willing seller, both informed and acting at arm's length. Close attention is paid to Factor #1: Purpose, Factor #4: Return on Investment, Factor #5: Liquidity, and Factor #24: Risk — because these define how rational buyers price uncertainty.

The 5 Senses Inspection Report provides observable confirmation that management depth, systems, and client stability support the valuation assumptions rather than contradict them — ensuring the number is grounded in operational reality, not just financial statements.

"What is the fair market value of my business?" is not a mechanical calculation. It is a real-world judgment about risk, control, sustainability, and transferability — and that judgment is where 28 years of owner-operator and valuation experience does the heavy lifting.

Why It Is Not Mechanical

On paper, valuation appears formula-driven. In reality, governance rights, risk concentration, growth durability, market conditions, and stakeholder dynamics materially affect value. The legal definition of Fair Market Value is straightforward; arriving at the correct number for a specific business is not.

Where Experience Changes the Number

Decisions around normalization, premiums, discounts, projections, and defensibility require judgment formed through lived ownership, negotiation, and financial accountability. An experienced valuator knows not just how to calculate Fair Market Value — but how to defend it when challenged by a buyer, a lender, or CRA.

Why the Gut–Brain Axis Matters

The brain performs disciplined financial analysis. The gut recognizes unrealistic narratives, hidden leverage, emotional distortions, and deal risk. Together they produce conclusions that withstand scrutiny — in negotiation, in due diligence, and in court.

Protecting Financial Lives

The final number affects wealth, control, solvency, tax exposure, and long-term relationships. Requiring experienced, documented valuation judgment ensures the answer is fair, defensible, and durable. See Eric's Experience page for a full background on qualifications and court-proven track record.

Why does fair market value matter beyond a sale?

Fair Market Value is the legally and financially recognized standard used in business sales, shareholder disputes, divorce proceedings, CRA audits, estate planning, and lender assessments. Using any other standard — book value, a rule-of-thumb multiple, or an informal estimate — exposes you to challenge from buyers, tax authorities, or opposing counsel.

Is fair market value the same as what a buyer will actually pay?

Not always. Fair Market Value assumes an arm's-length transaction between informed, willing parties. A strategic buyer may pay more due to synergies. A distressed seller may accept less. Fair Market Value establishes the rational baseline — the number that holds up under scrutiny regardless of who is at the table.

How is fair market value different from book value?

Book value reflects the net assets on the balance sheet at historical cost, minus depreciation. Fair Market Value reflects what those assets — including all intangible assets such as goodwill, client relationships, and systems — are actually worth in the current market. For most Canadian businesses, intangible assets represent 70–90% of total Fair Market Value, meaning book value dramatically understates the true worth of the business.

Does CRA accept a Fair Market Value report for tax purposes?

Yes. CRA requires Fair Market Value to be used for share transfers, estate valuations, shareholder benefit assessments, and capital gains calculations. A defensible, documented FMV report from a qualified valuator is the strongest protection against CRA reassessment of the transaction.

How long does it take to get a Fair Market Value report?

Eric Jordan delivers Fair Market Value reports in 10 business days from receipt of the required financial documents. The report is structured to satisfy CRA standards, legal requirements, and buyer due diligence — and is backed by 28 years of owner-operator and court-proven valuation experience.

You receive a fair market value that is explainable, defensible, and consistent with legal and tax definitions — reducing the risk of renegotiation, failed deals, or post-closing disputes. The number holds up because it was built to hold up.

Eric Jordan delivers Fair Market Value reports in 10 days for a basic flat fee of $3,500. Canada-wide. Call toll-free or email to discuss your situation directly.