Fair Market Value
Fair market value is defined as the price, in cash and cash equivalents, at which a business would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties acting at arm’s length and both parties having reasonable knowledge of the relevant facts.
Our business valuation services have been used to complete assignments such as corporate restructuring with the CRA, fulfilling shareholder agreement requirements, and facilitating familial ownership transitions. Even if you are not currently facing a situation where a valuation is mandatory, knowing the value of what you have built can help you to make educated decisions going forward.
Business Valuation Methods
Robbinex generally utilizes three main approaches to valuations:
Asset Approach
Income/Cash Flow Approach
Market Approach
The asset approach considers the value of all property, equipment, and physical assets required for the business to function.
The income/cash flow approach formulates a value by analyzing the company as a going-concern, this is generally a function of the business’ ability to continue to earn income and return on investment (ROI).
The market approach values the equity of a company based on observations of public and private transactions.
Have you received a valuation on your business before?
Why a Deeper Valuation Matters
When it comes to understanding the true value of your business, relying solely on a multiple of EBITDA can be dangerously misleading. At Robbinex®, we believe that every business is unique—and that its value can’t be reduced to a simplistic formula or industry “Rule of Thumb.”
As one of the leading valuation companies with over 50 years of experience and more than 1,500 client assignments, we’ve learned that the real value of a business lies not in its past performance, but in its future potential—and in the hundreds of factors that influence it. For business owners in Ontario, accessing reliable and comprehensive business valuation services is essential to making informed decisions.
The Trouble With EBITDA Multiples
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is often used because it’s easy to calculate and widely available. But that simplicity comes at a cost:
- Ignores future capital expenditures (CAPEX)
- Doesn’t reflect seasonal working capital needs
- Overlooks operational risks like key employee retirements
- Fails to account for customer concentration or supplier dependency
- Skips over structural considerations like tax treatment or transaction type
Even the “multiple” used in EBITDA valuations is often subjective and unsupported. Whether it’s 4x, 6x or 10x—choosing the wrong multiple can overvalue or undervalue your business by millions. That’s why working with a professional valuations company is crucial—they bring context, accuracy, and insight that generic methods miss.
Beyond Numbers: What Really Impacts Value?
Our valuation process takes a holistic, buyer-oriented view. We assess:
- Employees and management depth
- Customer base strength and concentration
- Market dynamics and competitive threats
- Technology and equipment readiness
- Supplier flexibility and risk
- Legal structures, agreements, and tax exposure
Most importantly, we ask: Would we buy this business? If not—why not?
Whether you’re preparing to sell, planning succession, or just seeking clarity, a comprehensive business valuation can help you unlock true business value. Trust the team at Robbinex® to provide expert business valuation services tailored to your unique needs.
Reduce Risk, Increase Value
Business valuation isn’t just about numbers—it’s about risk. The less risk your company presents to a potential buyer, the higher the value it can command.
At Robbinex®, we don’t just calculate value; we help you build it. As a trusted valuations company, we offer comprehensive, strategic business valuation services that go beyond the spreadsheet.
The Risk-Value Connection
There’s a direct relationship between risk and value. When risk decreases, the earnings multiple applied in your valuation often increases. That means your business could be worth significantly more without changing revenue—just by being less risky to a buyer.
As one of the experienced valuation companies in Ontario, we use a Company-Specific Risk Premium model, evaluating 18 unique operational and financial risk factors to assess where your business can improve. Some of these include:
- Key customer and supplier dependency
- Quality and reliability of financial data
- Employee age, retention, and redundancy
- Profit consistency and cash flow
- Equipment and facility readiness
- Competitive position and market threats
Real-World Results
We often assemble an advisory council to assist an owner to improve their company:
Case Study 1: Strategic Financing and Growth Support
A manufacturing client required a new facility to scale operations but faced challenges securing the necessary financing. Our advisory team not only arranged the required funding but also provided strategic guidance that contributed to substantial growth. As a result, the company’s annual revenue increased from $2 million to $7.5 million over a three-year period.
Case Study 2: Operational Restructuring for Profitability
In another engagement, we identified inefficiencies in the company’s organizational structure. We recommended a realignment of responsibilities and decision-making authority. Within 12 months of implementing these changes, the company’s EBITDA more than doubled—rising from $4 million to $9 million—demonstrating the impact of optimized management structures on profitability.
In all cases, the result was a higher business valuation, not just because of stronger performance—but because buyers perceived significantly less risk. That’s the power of working with a valuations company that deeply understands both the mechanics of business and the mindset of the people behind it.
Smart Changes. Lasting Impact.
Every change you make should help a new owner take over with confidence. Temporary fixes, unaddressed staff issues, or deferred investments can raise red flags during due diligence.
With our expert business valuation services, we help you focus on strategic changes that make your business truly ready for transition—ones that stand the test of time, scrutiny, and ownership change.
Whether you’re preparing to sell, planning for succession, or benchmarking your performance, Robbinex® provides the insights you need through tailored business valuation in Ontario.
Business Valuation Reasons
There Are Many Reasons Why a Business Owner May Require a Business Valuation
Merger or Acquisition
Hiring an independent valuations company when approached to sell, merge, or acquire enables you to negotiate on a level playing field.
Maintain Confidentiality
Robbinex provides business valuation services and the services of a business intermediary, protecting your confidentiality by limiting the number of involved parties, and requiring the execution of a comprehensive NDA (Non Disclosure Agreement)
Change in Family Structure
Hiring an organization, like Robbinex, that provides valuations and the services of a business intermediary, protects your confidentiality by limiting the number of involved parties.
Family Business Transition
If your business has family members in key roles, they may be well-suited to take over when you’re ready to move on. A business valuation ensures the transition is fair and equitable, for all members of the family.
Employee Ownership Transfer
Long-standing employees can be strong candidates to take over a business. A business valuation will ensure fair compensation in the transaction.
Value for Partnership Agreement
Many partnership agreements require regular business valuations. A valuations company can work with your team to carry out this requirement and offer additional value-added services.
Loss of a Shareholder
Loss of a shareholder may trigger a requirement for a business valuation, in order to calculate the basis for inheritance or estate taxes.
Employee Compensation
Some bonus plans are tied to business valuations.
Employee Stock Ownership Plans (ESOPs)
A business valuation may be used to set up an Employee Stock Ownership Plan, and many firms that operate as such perform a valuation annually, to measure milestones, productivity, or establish a price for entry or exit from the ESOP.
Tax and Estate Planning
Certain sophisticated estate planning vehicles such as family trusts, estate freezes, and corporate restricting efforts require business valuations.
Partnership Changes
Adding or buying out a partner usually requires a business valuation.
Baseline for CFO Decisions
An annual codicil update to your business valuation will help an owner better understand the value drivers of their business, as well as how an investor or buyer will be likely to perceive the business.
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