When people talk about what a business is “worth,” they usually jump right to the number.
But before you get anywhere near that number, you have to agree on something more important: the frame you’re looking through.
In valuation, that frame is called the premise of value—and it can completely change the picture.
A Tampa Example
Imagine you own Gulf & Graze, a small charcuterie tucked into a quiet neighborhood, away from the tourist-heavy parts of the city. You know most of your customers by name. You’ve invested in good ovens and they’re fully paid for. The lease is fair. You’re earning a steady living and the space smells of warm bread every morning.
If we’re valuing Gulf & Graze as a going concern—meaning the business will keep running just as it is—then those ovens, your recipes, your loyal regulars, and your reputation all count toward the value.
Change the Frame, Change the Number
Now, picture something different: you’ve decided to close next month.
In that case, the premise becomes an orderly liquidation. You’d sell the ovens, mixers, display cases, maybe even your recipe binders—piece by piece—over a reasonable time. The total will almost always be lower than the going concern value.
And then there’s the forced sale scenario—think “everything must go by Friday.”
No time to wait for the right buyer. You take what’s offered. Unsurprisingly, that number tends to be the lowest of all.
Same Shop, Different Story
It’s still Gulf & Graze. Same four walls. Same aroma of rosemary focaccia layered with silky prosciutto in the morning. But the premise you choose—going concern, orderly liquidation, or forced sale—changes the value dramatically.
Most small businesses in Florida are valued as going concerns because that’s the goal: selling a living, breathing business, not just its parts.
But every so often, circumstances call for a different frame.
Why It Matters
If you and a buyer—or a lender, or a potential partner—aren’t picturing the same frame, you’re not looking at the same thing. And you can’t possibly agree on value if you’re not even in the same picture.
For small, owner-operated companies, the right premise is often obvious. But in larger, more complex businesses—multi-location cafés, medical practices, manufacturing plants—choosing the premise can be a strategic decision in itself.
That’s a conversation for another day.
Simone Dominique is an industry analyst focused on the human side of business transitions. Through her writing and research, she provides clarity on the M&A process for owners and buyers, exploring the intersection of market data and owner psychology.
