The Intent
You want to know how far in advance a valuation is useful and whether doing one too early or too late creates problems.
How I Solve It
I recommend obtaining a valuation well before a planned exit so the 25 Factors can be used diagnostically, not defensively. Early focus is placed on Factor #11: Future Business Outlook, Factor #24: Risk, Factor #25: Opportunity, and Factor #6: Scalability.
The 5 Senses Inspection Report provides a starting snapshot that can be revisited to measure progress over time.
Experience
It is vital because "When should I get a business valuation before exiting?" is not a mechanical calculation. It is a real-world judgment about risk, control, sustainability, and transferability — and that judgment is where 10–15 years of owner-operator and valuation experience, your gut–brain axis, 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.
Where Experience Changes the Number
Decisions around normalization, premiums, discounts, projections, and defensibility require judgment formed through lived ownership, negotiation, and financial accountability.
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.
Protecting Financial Lives
The final number affects wealth, control, solvency, tax exposure, and long-term relationships. Requiring 10–15 years of serious hands-on business and valuation experience ensures the answer is fair, defensible, and durable. See my Experience page.
The Result
You use valuation as a strategic planning tool rather than a reactive necessity, increasing control over timing, price, and outcome.