For most owners the business is the single largest thing they own, and also the one asset whose value they could not state within a wide margin if asked today. This page sets out what the sourced data actually shows about how few owners know their number, why that gap is costly, and what sets the value, with every figure named and dated. Where a widely repeated claim has no traceable source, we say so rather than pass it along.
About 80 percent of the average owner's net worth is locked in an asset they have probably never priced. That single fact is why every number below matters.
The numbers at a glance
| What the data shows | Figure | Source |
|---|---|---|
| Share of the average owner's net worth tied up in the business | ~80% | Exit Planning Institute, 2023 |
| Owners who have had a formal valuation in the last two years | ~60% | Exit Planning Institute, 2023 |
| Owners who want to exit within 10 years / within 5 years | 75% / 49% | Exit Planning Institute, 2023 |
| Owners with no long-term plan or unsure | ~33% (40% of non-employers) | Gallup, 2024 |
| Businesses brought to market that actually sell | about 1 in 5 | Snider, Walking to Destiny |
| Owners who prefer an internal or family transfer | ~70% | Exit Planning Institute, 2023 |
| Family businesses reaching the 2nd / 3rd generation | 40% / 13% | Exit Planning Institute, 2023 |
| Typical multiple Honest Assessment applies to SDE | about 2 to 4x, average ~2.6x | Honest Assessment |
| Business value set to change hands as owners 55+ exit | ~$14 trillion | Exit Planning Institute |
Most of an owner's wealth sits in one asset they cannot see
The Exit Planning Institute's 2023 National State of Owner Readiness survey reports that, on average, about 80 percent of an owner's net worth is tied up in the business, a single illiquid asset they actively manage every day (Exit Planning Institute, 2023). The majority of a typical owner's wealth is not in a diversified account they can check on their phone. It is in the company, where its value is invisible day to day and cannot be turned into cash on short notice.
Any financial planner would flag a household with the bulk of its net worth in one undiversified, illiquid position. Owners live in exactly that position, and most are not tracking the value of the position at all. It is also why so many owners expect to fund their retirement primarily through the eventual sale of the business, which makes the sale price not a detail but the number their life after work depends on.
Few owners have actually checked the number
According to the Exit Planning Institute's 2023 National State of Owner Readiness survey, about 60 percent of owners have had their business formally valued in the past two years, up from roughly 18 percent a decade earlier (Exit Planning Institute, 2023). The trend is improving, but it still leaves a large share steering their most valuable asset without a recent read on what it is worth.
You will also see the claim that "98 percent of owners do not know the value of their business" repeated across advisor blogs. We looked for its origin and could not find a survey behind it, so we do not use it. The defensible version is the EPI figure above, paired with the planning data below.
You manage what you measure. An owner who has never seen a defensible value has no way to know whether the last three years of work added to it or quietly eroded it, and no way to know which part of the business is dragging the number down. The value is a scoreboard, not just a sale price.
Intent is running well ahead of planning
The 2023 EPI survey finds that 75 percent of owners want to exit their business within ten years, and 49 percent within five (Exit Planning Institute, 2023). More broadly, EPI estimates that 73 percent of privately held companies plan to transition within the decade, representing roughly 14 trillion dollars in business value. Yet a 2024 Gallup study found that about one third of owners either have no long-term plan for the business or are unsure what will happen to it, a share that rises to 40 percent among owners with no employees (Gallup, 2024). EPI data also shows a strong preference, around 70 percent, for keeping the business in the family or transferring it internally, paths that only work if the value and the readiness are built years ahead.
An intention to exit is not a plan, and a plan built without a current valuation is a guess. The owners most likely to be caught flat-footed are the ones who assume they will simply sell when ready, without checking whether the business is worth what they need or whether it can run without them.
The five Ds: why the timing is often not yours to choose
Exit planners describe five events that force a transition whether or not the owner is ready, known as the five Ds: death, disability, divorce, distress, and disagreement among owners. The point of the framework is simple. A large share of exits are not the calm, planned sale owners imagine, and the businesses that come through those events with their value intact are the ones whose owners already knew the number and had the business running on systems rather than on themselves.
Readiness is not only about the exit you plan. It is insurance against the exit you do not.
What actually sells, and what does not
Wanting to sell and selling are different things. Business brokers and exit planners consistently find that only a minority of businesses brought to market actually change hands, commonly estimated at only about one in five (Christopher Snider, Walking to Destiny). EPI frames the same gap as a funnel: of the roughly quarter-million owners who set out to exit, only a small fraction sell at the value they wanted.
A business that will not sell at the owner's number is not a retirement plan, it is a job the owner cannot leave. The difference between the two is usually visible years earlier in the value and in how dependent the business is on its owner.
What sets the number
A small business can be priced on revenue, but for an owner-operated company that is a weak guide. The more reliable basis is SDE, the seller's discretionary earnings that flow to a single owner and a proxy for the owner's cash flow. Honest Assessment places most owner-operated businesses in a range of about 2 to 4 times SDE, averaging near 2.6 times, with the exact figure set by how transferable the business is. For how those methods work in full, see our guide to how small businesses get valued.
Because the number is set by SDE and by how transferable the business is, two companies with identical revenue can be worth very different amounts. Revenue tells you almost nothing on its own. SDE and the multiple applied to it tell you almost everything.
Why the comparison matters more than the number
A single value in isolation is hard to act on. What makes it useful is context: how your profit margin, your owner pay, and your cost structure compare to other businesses in your industry. That comparison turns a value into a to-do list. If your margin sits below your industry's typical range, that gap is not just lost profit this year, it is a lower multiple applied to a lower base, which is real value left on the table. If the business leans heavily on you personally, that shows up as a discount a buyer will name out loud. The owners who close the wealth gap are the ones who know both numbers: what the business is worth, and how it stacks up against its peers.
What this means for your business now
You do not need to be selling to need this. Given that most of your net worth likely sits in the business, that only about six in ten owners have a recent read on that value, and that a third have no plan at all, knowing your number and how it compares to your industry is closer to an annual physical than a for-sale sign. It tells you where you stand, what is holding the value back, and what to do about it, on a normal week, years before any transition.
Find out where you stand
Try the free valuation calculator or see how your business compares in the full assessmentMethodology and sources
Every figure on this page is attributed to a named third party and dated. Where a widely circulated claim has no traceable source, we exclude it and say why. Figures are refreshed as the underlying surveys update.
Exit Planning Institute, 2023 National State of Owner Readiness. Owner net worth concentration (on average about 80 percent of wealth tied up in the business); share of owners formally valued in the last two years and the decade-earlier comparison; five-year and ten-year exit intent; the 73 percent transition and 14 trillion dollar figure; internal-transfer preference; and generational survival.
Gallup, 2024 (Pathways to Wealth, Year 2). Share of owners with no long-term plan or unsure, and the split between employer and non-employer firms.
Christopher Snider, Walking to Destiny (Exit Planning Institute). The share of marketed businesses that actually sell.
Honest Assessment. The SDE multiple range applied in our valuation model, about 2 to 4 times, averaging near 2.6 times, consistent with our small business valuation guide.
Generational survival, for context
Among family businesses, EPI reports that about 40 percent survive into the second generation and 13 percent into the third (Exit Planning Institute, 2023). The drop is not mainly about heirs losing interest. It tracks closely with whether the value and the transition were planned early, which returns to the same theme: the businesses that last are the ones whose owners knew the number and built for the handoff.