By George Sandmann, Growth-Drive President & CEO
Does this sound right to you? “Accurate valuation is the backbone of strategic planning, exit planning, and M&A preparation.”
Whether an advisor is guiding a business owner toward a future sale, designing a succession strategy, or structuring an internal transfer, the question of value is always front and center—and the stakes are high. Business owners make life-changing decisions based on the numbers we produce. That is why, at Growth-Drive, we built the CLARITY™ valuation engine to meet professional standards, to be peer-reviewed, and to deliver planning-reliable insights that advisors can trust.
This article pulls from C3D™Class 2: ‘Business Value Considerations’. C3D Certification in the 3 Dimensions of Business Growth™ is on-demand deep learning on predictably and sustainably growing profits & value.
Our CLARITY™ calculations of value—both Market Comparisons (Market Comps) and Discounted Cash Flow (DCF)—are grounded in the same professional frameworks
recognized by NACVA, AICPA, and ASA. They are drawn from curated private-market transaction data, incorporate company-specific risk through Strategic Capacity scoring, and provide business owners with an accurate picture of both latent and transferable value.
In this article, we clarify what an opinion of value is, what a calculation of value is, when each is used, and how our CLARITY methodology supports advisors, CPAs, exit planners, fractional CFOs, wealth managers, investment bankers, and private equity operators in delivering better outcomes for business owners.
In the valuation profession, an Opinion of Value (or formal valuation) is a comprehensive, standards-based conclusion performed by a qualified valuator such as a CVA, ABV, or ASA.
An opinion of value requires:
It is the gold standard when a valuation must withstand scrutiny—for example, ESOP compliance, litigation, IRS filings, divorce, or certain M&A transactions. It is broader in scope, more time-intensive, and more expensive.
CLARITY does not replace a formal valuation—nor should it. What CLARITY provides is a reliable calculation of value for strategy, planning, and negotiation preparation.
A Calculation of Value is an estimate of value performed using limited procedures agreed upon by the client and the analyst. It applies selected methodologies (e.g., Market Comps or DCF) without requiring the full depth of analysis used in an opinion of value.
As stated in the attached document:
“A calculation of value is relevant to strategic planning, and for wealth and insurance planning. Growth-Drive’s CLARITY calculation of value meets the ‘Calculation of Value’ standards set out by the NACVA, ASA and AICPA.”
A calculation of value is the right tool when:
CLARITY’s calculations are intentionally designed for this purpose.
CLARITY’s valuation engine is not a simplistic multiple look-up tool. It is a standards-compliant, data-driven system built with input from certified valuators and M&A practitioners. Its accuracy and reliability come from the following pillars:
CLARITY uses private business M&A data filtered by:
Market Comps are not enough. Real buyers discount for risk.
CLARITY integrates Strategic Capacity scoring—which assesses management, finance, scalability, operational strength, customer concentration, and competitive position—to adjust value upward or downward based on quality.
This ties directly to industry best practice:
“Best practice is to compare like-for-like businesses by industry and revenue range, discounting value considering the subject business risk profile.”
CLARITY’s calculation procedures were built to align with Calculation of Value standards established by NACVA, ASA, and AICPA.
Growth-Drive's valuation framework has been taught and refined over a decade in collaboration with NACVA, EPI, BEI, and practicing CVAs and investment bankers. The system is pressure-tested by those who perform valuations and negotiate deals for a living.
CLARITY is specifically designed for:
As C3D Ed Wandtke MCA CPA CEPA CExP CVA puts it during the C3D course:
“The valuation insights provided by Growth-Drive serve as a critical input for strategic planning and decision-making.”
In third-party sales, Market Comparisons (Comparable Company Analysis and Precedent Transactions) dominate early-stage pricing discussions.
Market Comps help business owners answer:
But CLARITY goes further by adjusting these comps for Strategic Capacity, providing a realistic valuation range—not an inflated one. This prepares owners for real-world negotiations and quality-of-earnings reviews.
DCF typically plays a secondary, confirmatory role in M&A negotiations. Buyers may use it to validate their understanding of future cash flow potential.
In practice:
CLARITY’s regression-projection and Simulator give advisors a powerful ability to model this future value, including the impact of improving Strategic Capacity by 10% CAGR.
Internal transfers—MBOs, Gen 2 leadership transitions, and family transfers—operate under a completely different set of economic realities than external M&A.
In an internal sale:
C3D Ed Wandtke MBA CPA CEPA CExP CVA continues:
“For many internal transfers…the seller holds a note… In these cases it is common for value to be determined based on available future cash. DCF is therefore commonly used to establish business value.”
DCF is not just appropriate—it is essential. It aligns the valuation directly with the buyer’s ability to pay and creates realistic expectations for both parties.
Strategic Capacity is Growth-Drive’s unique measure of a company's ability to grow profits, grow value, and create buyer confidence. It is central to value because it quantifies risk—and valuation multiples are simply the market’s shorthand for risk.
Across the three Growth-Drive Dimensions of Growth:
Predictability reduces risk and increases valuation multiples.
Companies with sustainable, scalable growth command higher premiums and greater investor confidence.
Broad customer bases, accurate financials, and growth above market all increase buyer confidence and drive higher multiples.
Strategic Capacity ties these three dimensions into a single risk metric used throughout CLARITY.
This distinction is critical—and often misunderstood by business owners.
Latent Value is the potential value the business could achieve if it improved Strategic Capacity, corrected weaknesses, and aligned operations for growth and transferability.
It is what the business should be worth at maturity.
Transferable Value is what the business would sell for today, at its current level of risk, performance, and operational maturity.
CLARITY calculates both—showing owners the gap between today’s reality and tomorrow’s possibility.
This “value gap” is where advisory opportunities and strategic planning live.
We designed CLARITY to support:
These professionals need valuation tools that are:
CLARITY delivers all of this by combining professional valuation methodology with Growth-Drive’s proprietary Strategic Capacity framework.
As advisors, our responsibility is to give business owners the truth: not inflated numbers, not generic multiples, but a realistic assessment of where they stand—and what strategic steps will increase both profitability and transferable value.
CLARITY was built for this purpose.
It is accurate, peer-reviewed, standards-based, and designed specifically for strategic planning and M&A preparation. It helps advisors bridge the gap between value today and value tomorrow—and gives business owners the confidence to pursue their strategic intent with clarity.
When we combine proper valuation methodology with Strategic Capacity improvement, we help business owners build not just valuable companies—but immortal businesses that thrive across generations.
--END--
Thank you. We'd love to know what you think, comment here or email blog@growth-drive.com.