Most business owners focus on revenue and profit — the familiar metrics that show up on the P&L statement. But the most important metric — company value — is often overlooked. And that oversight could be costing you millions.

According to the Exit Planning Institute, only 17% of businesses that try to sell actually succeed. That means a staggering 83% of businesses fail to find a buyer or close a deal. Why? Because most business owners don’t understand the true value of their business — or how to increase it.

Worse, even those who know their company’s value probably aren’t tracking it consistently. According to the National Center for the Middle Market, only 40% of middle-market businesses have had a valuation done in the last three years. Just once every three years? That’s a dangerous blind spot. If you don’t know the value of your business, how can you increase it? How can you prepare for a successful exit?

The reality is that tracking company value annually isn’t enough to drive meaningful change. Monthly tracking is unrealistic — it’s too volatile and operationally disruptive. Quarterly tracking is the sweet spot. It allows you to monitor trends, make strategic adjustments, and align your growth efforts with actual increases in value.

Why Tracking Company Value Matters

Revenue and profit tell you how your business is performing today. Value tells you how much someone would pay to own it. Value reflects the strength of your business model, the scalability of your processes, the depth of your leadership team, and the health of your customer relationships.

Tracking company value isn’t just about preparing for a sale — it’s about increasing options and creating freedom. When you know your value, you can:

• Create freedom and options – A business that focuses on value is more likely to run without daily involvement from the owner.

• Position your business for a premium exit – Buyers are willing to pay a higher multiple for businesses with strong processes, consistent profits, and low owner dependency.

• Secure financing and partnerships – Lenders and investors will be more confident in your business’s future when you can demonstrate increasing value.

• Make better strategic decisions – Value-based insights help you decide where to invest resources and how to structure growth initiatives.

• Prepare for the worst-case scenario – Over 50% of business sales are unplanned due to issues like death, divorce, disability, and disagreements. Businesses that aren’t ready to sell can make these situations catastrophic.

• Create a legacy – A highly valued business is more likely to survive a leadership transition or sale, protecting the jobs and reputation you’ve built.

“What gets measured, gets managed.” – Peter Drucker

If you aren’t measuring value, you can’t manage it. If you can’t manage it, you can’t grow it.

Types of Business Valuation — Which One Matters?

Business owners often confuse different types of valuations. Understanding the distinction is critical because not all valuations serve the same purpose.

1. Market-Based Valuation

A market-based valuation is focused on what your business is currently worth — and what it could be worth with strategic improvements. It reveals:

• The current value of your business based on industry multiples and recent transactions.

• The potential value if you improve your business operations and profitability.

• The gaps between current and potential value — showing you exactly what’s holding you back.

This type of valuation is a powerful tool for strategic planning. It helps you focus on the right levers to increase value over time. If you’re looking to grow or prepare for an eventual sale, market-based valuation is the right tool.

2. Fair Market Value (FMV) Valuation

A fair market value (FMV) valuation is a formal appraisal conducted by a CPA or business valuation expert. It’s typically used for:

• Divorce settlements

• Estate planning

• Partner disputes

• Taxation purposes

An FMV valuation is based on defensible financial models and legal standards. While it’s necessary for compliance and legal matters, it’s not designed to help you improve your business’s performance or strategic value.

If you’re trying to grow your business, an FMV valuation alone won’t help. It tells you what your business is worth today — not how to make it worth more.

Why Quarterly Value Tracking is the Sweet Spot

Measuring company value once a year is too infrequent to catch meaningful shifts in performance or market conditions. Waiting until you’re ready to sell is even worse — by that point, you’ve missed years of opportunity to increase your valuation.

On the other hand, tracking value monthly is too volatile and operationally disruptive. Market conditions and business performance fluctuate too much in 30 days to provide meaningful insight.

Quarterly tracking is the answer. It allows you to:

• Spot trends early and adjust strategy before you lose momentum.

• Hold your leadership team accountable for value creation initiatives.

• Fine-tune growth strategies based on real, market-based feedback.

• Align strategic decisions with long-term value creation.

When you track your value quarterly, you stay ahead of market changes. You can adjust your pricing, expand into new markets, or tighten your operations with enough time to make a real impact.

The Cost of Not Tracking Valuation

If you don’t track your company’s value regularly, you’re flying blind. Without consistent valuation data, you won’t know if your business is improving or losing ground. This can lead to:

• Missed Growth Opportunities – You might have hidden opportunities to increase value through better customer retention, pricing adjustments, or operational improvements — but you won’t see them without tracking value.

• Weak Exit Position – If you don’t know your value, you’ll have no leverage when it’s time to sell. Buyers will dictate terms, and you’ll likely settle for a low offer. Worse, you might not be able to sell at all.

• Lack of Strategic Direction – Without knowing your value, you can’t confidently decide where to invest resources or how to expand.

• Sudden Leadership Transitions – If you have to exit the business unexpectedly due to health issues or personal circumstances, your business may not be ready to transfer ownership smoothly — reducing its market value.

What Gets Measured, Gets Managed

Imagine you own a business worth $5 million today. With better processes, increased sales, and improved customer retention, it could be worth $10 million. But if you’re not tracking value consistently, you’re leaving $5 million on the table.

Many business owners wait until the months before they plan to sell to start focusing on value. That’s too late. According to UBS research, 81% of business owners who sold their business wish they had started preparing earlier.

Even worse, if the business is not able to sell you could be stuck with the hard decision of running it after you're tired of it or simply walking away. Sadly, these scenarios happen every day.

There’s no downside to tracking value quarterly — but there is a massive upside. The difference between a $5 million sale and a $10 million sale could be the difference between a comfortable retirement and a lifetime of regret.

Take Action: Start Measuring Your Value Quarterly

Stop leaving money on the table. If you track revenue and profit on your scorecard, you need to track value as well. Add a quarterly valuation to your scorecard and hold your team accountable for improving it.

Measure value. Manage value. Grow value!

👉 Measure the value of your business today with a market-based valuation you can add to your scorecard. Visit https://measure.valuecreationengines.com.

👉 Understand how to create value with a free copy of my book, A Business Owner’s Guide to Maximize Business Valuation.

Originally published on Darrell Amy's LinkedIn.