How much is my business worth? That's often the first question an entrepreneur asks when starting to think about a sale, a succession, a financing round, or an acquisition. Yet the value of a business goes far beyond its revenue or net income.
In Québec, the question is more relevant than ever. With the current wave of business transfers, many SME owners want to know the fair market value of their company before engaging discussions with a buyer, a successor, a bank, or an advisor. In this guide, we explain how business valuation works, which methods are used, what documents to prepare, and how Hadaly helps entrepreneurs track and improve their business value over time.
Why Get a Business Valuation?
A business valuation is not just about getting a number. It's a strategic tool that helps you make better decisions at every stage of your company's life:
- •Prepare a sale or transfer with a credible asking price
- •Secure financing from banks and financial institutions
- •Plan a succession or share freeze (gel successoral)
- •Attract investors or strategic partners
- •Settle a shareholder dispute or corporate restructuring
- •File a tax-compliant valuation for fiscal purposes (CRA, Revenu Québec)
A professional valuation gives you leverage. Whether you're negotiating with a buyer, a lender, or a partner, having a well-documented, methodology-backed valuation changes the conversation.
The 3 Main Business Valuation Methods
There is no single formula for business valuation. Professionals typically use a combination of approaches to arrive at a credible range of value.
1. EBITDA Multiples Method (Market Approach)
The most commonly used method for profitable SMEs. It applies a multiple to the company's normalized EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) based on comparable transactions in the same industry and region.
2. Discounted Cash Flow (DCF) Method
This method projects future cash flows over 3 to 5 years and discounts them back to present value using a discount rate that reflects the risk profile of the business. DCF is particularly useful for high-growth companies or businesses with significant future potential that isn't fully captured in current earnings.
3. Asset-Based Method
This approach values the business based on its net assets: the fair market value of all tangible and intangible assets minus liabilities. It's most appropriate for capital-intensive businesses, real estate holding companies, or companies that are not profitable. For most operating SMEs, this method typically produces the lowest valuation.
How Much Is a SME Worth in Québec?
The value of a business in Québec depends on many factors: sector, profitability, growth trajectory, client concentration, owner dependence, quality of the team, and market conditions. Based on Hadaly's transaction data across Canada, here are typical ranges:
These ranges are indicative. The actual multiple applied depends on many business-specific factors. Sectors like technology, healthcare, and professional services tend to command higher multiples than construction, retail, or manufacturing.
What Documents Are Needed for a Business Valuation?
To produce a credible valuation report, you typically need to provide:
- •Financial statements for the last 3 to 5 years
- •Detailed general ledger or trial balance
- •List of assets and liabilities (including off-balance-sheet items)
- •Revenue breakdown by client, segment, or product line
- •Key contracts (leases, supplier agreements, client contracts)
- •Shareholder agreements and corporate structure
- •Information on growth prospects, investments, and operational risks
The better your financial documentation, the more accurate and credible your valuation will be. Hadaly can generate a valuation from your financial statements or directly from your accounting software.
How Much Does a Business Valuation Report Cost?
The cost depends on the complexity of the business and the depth of analysis required.
Hadaly's valuation reports are built on real transaction data and industry benchmarks, making them a cost-effective starting point. For litigation, tax disputes, or regulatory filings that require a formal CBV opinion, a traditional engagement may be necessary.
How to Increase Your Business Value Before a Sale
The biggest mistake entrepreneurs make is discovering their business value only when they're ready to sell, with no time to improve it. Here are the key levers that increase valuation multiples:
- •Improve and stabilize EBITDA margins (reduce unnecessary expenses, optimize pricing)
- •Reduce owner dependence (build a management team, document processes)
- •Diversify your client base (no single client should represent more than 15-20% of revenue)
- •Build recurring or contracted revenue (subscriptions, long-term contracts, retainers)
- •Clean up your financial data (organized books, clear reporting, no personal expenses)
- •Prepare a data room with all key documents organized and ready for due diligence
The best time to start working on your business value is 2 to 3 years before a planned exit. The second best time is now.
Why Valuation Should Not Be a One-Time Exercise
Traditionally, a business valuation happens at a specific moment: before a sale, a transaction, a succession, or a financing request. But that approach often comes too late.
An entrepreneur who discovers their business value only at the moment of sale no longer has time to fix the factors that are dragging down the valuation: weak margins, client concentration, lack of structured financial data, no projections, high debt, or incomplete documentation.
The question is no longer just "how much is my business worth today?" but rather "what drives my value and how can I increase it over time?"
That's why Hadaly promotes a different approach: tracking your business value over time, understanding the levers, and acting on them month after month.
Get Your Business Valued with Hadaly
Hadaly provides entrepreneurs, advisors, and brokers with the financial intelligence they need to make confident decisions about business value.
Business Valuation
Professional, data-driven valuation reports backed by real transaction comparables from the Canadian market.
Value Tracking
Monitor your enterprise value over time with automated dashboards and benchmarking against industry peers.
Transaction Readiness
Generate CIMs, teasers, financial projections, and data rooms to prepare for a sale, financing, or transfer.
Whether you're exploring a sale, planning a succession, seeking financing, or simply want to understand what drives your business value, Hadaly gives you the clarity to move forward with confidence.
Frequently Asked Questions
How much is my business worth?
The value of a business depends on several factors: profitability, EBITDA, industry sector, growth trajectory, assets, debt, team quality, owner dependence, and market conditions. A professional valuation provides a credible range based on established methodologies and comparable transactions.
What is the most common method to value a SME?
For profitable businesses, the EBITDA multiples method is the most widely used. It applies a market-derived multiple to the company's normalized earnings. The multiple varies by industry, size, and risk profile, typically ranging from 3x to 7x for Canadian SMEs.
How much does a business valuation cost in Québec?
Costs vary depending on the complexity and the type of report. With Hadaly, a data-driven valuation report starts at $2,000. Traditional chartered business valuator (CBV) engagements can range from $5,000 to $25,000 or more.
What documents are needed to value a business?
You typically need financial statements for the last 3 to 5 years, accounting data, debt and asset details, employee information, key contracts, revenue breakdown by client or segment, and information about growth prospects.
When should I get my business valued?
Ideally, before starting a sale, succession, financing request, or acquisition. A valuation is also valuable several months or years before a transaction to identify levers that can increase your business value over time.