If you’re a business owner in British Columbia thinking about selling or planning for the future, one of the first questions you’ll ask is: “How much is my business worth?” In 2026, Business Valuation in BC has become more sophisticated, with buyers and lenders expecting clear, data‑driven financial justification for a company’s asking price.

This guide breaks down the valuation process used across BC, explains key formulas, and shows you how business brokers determine accurate and defensible market values.

Why Business Valuation Matters in 2026

A proper valuation ensures you don’t underprice your business or scare away qualified buyers with an inflated number. Accurate valuation is essential for:
– Selling your business
– Securing financing
– Bringing on investors
– Estate and tax planning
– Strategic growth planning

With more sophisticated buyers entering the BC market, accurate pricing is more important than ever.

External Source: BDC Valuation Insights

The Two Most Common Valuation Methods Used in BC

Most small and mid‑sized businesses in BC are valued using one of two formulas:

### 1. SDE (Seller’s Discretionary Earnings) Method
Used for owner‑operated businesses.
Formula: **SDE × Industry Multiple = Business Value**

### 2. EBITDA Method
Used for larger companies with management teams.
Formula: EBITDA × Industry Multiple = Business Value

SDE is the most common method for businesses under $5M in revenue.

How to Calculate Your SDE (Seller’s Discretionary Earnings)

SDE represents the true earning power of the business to a single owner‑operator. It is calculated by adding back discretionary and non‑cash expenses.

SDE includes:
– Net profit
– Owner salary
– Owner benefits
– One‑time or non‑recurring expenses
– Depreciation & amortization
– Interest & taxes

A clean SDE calculation is essential for accurate valuation.

Understanding Industry Multiples in BC (2026)

Multiples vary significantly by industry, market demand, and business size. Typical BC valuation multiples:
– Restaurants & cafés: 1.5–2.5× SDE
– Service businesses: 2.0–3.5× SDE
– Construction & trades: 3.0–4.5× SDE
– Professional services: 2.5–4.0× SDE
– Manufacturing: 3.5–5.5× EBITDA

Higher multiples apply when businesses have strong financials, trained staff, recurring revenue, and low owner dependency.

Goodwill vs. Asset Value — What’s Included?

A **Business Valuation** includes both tangible and intangible elements:
– Goodwill (brand, reputation, systems, customer loyalty)
– FF&E (furniture, fixtures, equipment)
– Inventory
– Lease value
– Contracts or recurring revenue streams

In most BC businesses, goodwill represents the majority of total value.

How Lease Terms Affect Business Value

In BC — especially Vancouver — the lease is a major valuation factor. Buyers pay more for businesses with:
– Long remaining lease terms
– Fair annual rent increases
– Transferable leases
– Strong locations

A poor lease can reduce value, slow buyer interest, or kill deals entirely.

Common Red Flags That Reduce Your Business Value

Valuation decreases when a business has issues such as:
– Declining revenue or profit
– High owner dependency
– Poor bookkeeping
– Outdated equipment
– High staff turnover
– Weak online presence

Preparing early can significantly increase valuation.

How Buyers Evaluate Your Business in BC

BC buyers in 2026 are more analytical than ever. They request:
– Financial statements (3–5 years)
– Tax returns
– Lease agreements
– Payroll summaries
– Equipment lists
– Supplier contracts
– Customer concentration reports

The cleaner your documentation, the higher your valuation.

Working With a Business Broker for a Professional Valuation

A professional Business Broker Vancouver uses real sales comparables, financial formulas, and industry benchmarks to produce an accurate valuation. Brokers also understand what buyers are currently paying in BC and how to position your business for maximum value.

Learn more: Business Valuation Services

When Should You Get a Business Valuation?

You should consider a valuation when:
– Selling your business
– Planning retirement
– Bringing on partners or investors
– Applying for financing
– Divorce or estate planning

A valuation is not just for selling — it’s an essential business planning tool.

How to Increase Your Business Value Before Selling

Simple improvements can increase valuation by 10–30%:
– Improve bookkeeping
– Reduce owner dependency
– Renew key contracts
– Improve online presence
– Stabilize staffing
– Increase recurring revenue systems

Small steps can lead to major gains in sale price.

What Is a Fair Price for Your Business?

A fair price balances profitability, industry multiples, risk factors, and buyer demand. An overpriced business will sit on the market and lose value. An underpriced business means leaving money on the table.

Accurate valuation is the key to a smooth and profitable sale.

Get a Professional BC Business Valuation Today

If you want to know exactly how much your business is worth, a professional valuation provides clear justification, realistic pricing, and strong negotiating power. Vancouver Business Brokers offers confidential valuation services for all industries across BC.

Request a valuation: Business Valuation BC

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