What is my business worth?

There is rarely one right answer. Value depends on how much the business earns, how predictable the income is, how dependent it is on the owner, how much capital it needs – and what a buyer is actually willing to pay. The accounts are the starting point, but valuation is about the future.

Enterprise value is not the same as the value of the shares

One of the most important distinctions in a sale process is between enterprise value and equity value. Enterprise value describes, in simple terms, the value of the operations regardless of how they are financed. A simplified bridge from one to the other: enterprise value, less debt and agreed debt-like items, plus agreed cash, plus or minus a working capital adjustment, equals equity value. That is only a model. What counts as debt, cash and normal working capital is agreed in each transaction. So it is entirely possible to hear that the business is worth 20 million while the price for the shares comes out materially lower.

Three common ways to value a business

International valuation standards distinguish broadly between a market approach, an income approach and a cost or asset approach. No single method fits every situation. Earnings and multiples. A common approach is to start from a normalised operating result and compare the company with similar businesses or earlier transactions. A company with normalised EBITDA of 3 million and an illustrative multiple of 5 has an enterprise value of 15 million. But the multiple of 5 is not a general market rule – it is affected by sector, size, growth, margins, risk and market conditions. There is no universal Norwegian SME multiple. Future cash flow. In a discounted cash flow analysis you calculate today's value of the cash flows the business is expected to generate, discounted at a rate reflecting the risk. The method is useful where the future differs substantially from the history, but it depends heavily on the assumptions. A detailed model is not necessarily a more precise model if the forecasts are weak. The value of the assets. For some companies much of the value sits in property, machinery, ships or financial investments. It can then be relevant to calculate what the assets are worth, adjusted for debt and other obligations.

You have to normalise the result before you use it

Two companies can show exactly the same result and still have very different real earning power, because historical figures can include things that will not continue after a sale. Suppose the company shows EBITDA of NOK 3 million. The owner works full time as general manager but has only taken NOK 400,000 in salary. If a new owner has to pay 900,000 for an equivalent manager, the real cost is NOK 500,000 higher than the accounts show. At the same time the company may have had a documented one-off cost of NOK 300,000 that is not expected to recur. Normalisation is about understanding differences like that – not about finding as many costs as possible to add back. Typical questions are whether the owner's salary is at market rates, whether income or costs are genuine one-offs, whether related-party trading is on normal terms, and whether today's cost level is sustainable. Where private expenses have wrongly been charged to the company, that also has to be assessed for accounting and tax.

What makes one business more valuable than another?

The result tells only half the story. A buyer will also try to understand how secure that result is going forward. A company with many customers, long contracts, recurring income and an organisation that functions without the founder has a different risk profile from one where a single customer accounts for half the turnover and the owner personally handles all the sales. Buyers therefore look at customer concentration, recurring income, growth and margins, dependence on key people, competitive advantages, and how much capital the business needs. That is why two businesses with the same EBITDA can be worth very different amounts.

Do not forget the investment needed after completion

EBITDA can hide a need for capital. Think of a factory reporting strong results because the owner has deferred replacing machinery for several years. The EBITDA looks impressive, but the buyer knows substantial investment will be needed shortly after taking over. Such investment is not automatically deducted from EBITDA. It has to be taken into account in expected cash flows, in the risk, in the multiple chosen or in the terms of the deal. For some businesses the cash flow after necessary investment is therefore far more interesting than EBITDA on its own.

An example: from the value of the operations to the value of the shares

Assume normalised EBITDA of NOK 3,000,000 and an illustrative multiple of 5.0. The enterprise value is then NOK 15,000,000. The company has NOK 2.5 million of interest-bearing debt and NOK 1 million of cash which, under the agreement's definition, forms part of the price calculation. Working capital is at the agreed normal level. The simplified equity value is then 15,000,000 less 2,500,000 plus 1,000,000 – NOK 13,500,000. But that is still not necessarily what the owner ends up with in a private account. Transaction costs, tax, a retained part of the price and other agreed terms can come on top. When a buyer later comes to check whether the figures hold, the process usually moves on to financial due diligence.

The value in your tax return is not the sale value

For owners of unlisted companies there is often confusion about the wealth tax value of the shares. That value is not a commercial valuation. For personal owners of Norwegian unlisted shares the general rule in 2026 is that the shares are valued at 80% of the shareholder's proportionate share of the company's tax wealth value – a 20% valuation discount. The general rule is also that you use the company's value at 1 January of the income year, with special rules for certain capital changes and for newly formed companies. The company's net wealth for tax purposes is calculated under specific tax rules, and goodwill is not included – not even where goodwill has been bought and recognised in the company. A business with strong customer relationships, a brand and high future earnings can therefore be worth far more on a sale than the wealth value suggests. Tax wealth value is a tax base, not an estimate of market value.

What you keep also depends on how you own the shares

The valuation itself is not affected by whether you own the shares personally or through a holding company. But what you keep after a sale can be. Where a Norwegian AS or holding company sells shares in a Norwegian AS, the gain will normally fall under the participation exemption and be exempt from tax in the company. If you sell as a personal shareholder, the shareholder model applies. For 2026 the taxable gain after the shielding deduction is multiplied by 1.72, giving an effective rate of 37.84%. So it is worth separating three different questions: what the operations are worth, what the shares are worth, and what the owner keeps after the transaction. The three amounts can be very different.

A valuation is a range, not a single answer

For an unlisted SME there is rarely an objective price you can look up. A good valuation rests on documented assumptions and usually several angles: historical results can be normalised, comparable companies and transactions examined, future cash flows modelled and balance sheet values assessed. In the end it is the market that decides. A strategic buyer who can realise large synergies may be willing to pay more than a financial buyer, and several interested buyers can produce a different price from a process with one bidder. A more useful question is therefore not only what the business is worth, but what it is worth – to whom, on what assumptions and in what kind of transaction.

This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.

Is it urgent?

We can work out what actually has to be done, what documentation exists and how quickly it can be sorted. You can also reach us in the evenings and at weekends.

GET IN TOUCH