A Santa Maria perspective
What is my business worth? A valuation guide for founders in Panama
Understand valuation methods, earnings adjustments, and the difference between business value and the amount you would receive.
Valuing your company means understanding what drives its results, what risks it faces, and what would transfer to a buyer. This guide helps you prepare for that conversation; it does not replace an independent valuation.
There is no single formula
Valuation approaches include income, market, and assets. An earnings multiple can provide a reference, but it is not the only method or equally suitable for every business. The IRS business valuation guidelines describe these approaches as a general technical framework, not Panamanian regulation.
Ask why a method was selected, which comparisons were used, and what assumptions support the result.
Understand the adjustments
When assessing adjusted earnings, distinguish recurring results from exceptional items. Document proposed adjustments and review them with your accountant.
Compare the founder's compensation with the cost of replacing the functions they perform: above-market and below-market pay require adjustments in opposite directions. Not every expense described as exceptional will disappear after a sale.
Adjusted earnings are not automatically available cash. Consider required investment, working capital, and financial obligations as well.
Explain what sustains the business
Prepare information about customers, margins, contracts, the team, and dependence on your daily involvement. Explain strengths and uncertainties. No individual factor guarantees a multiple or price.
Gather several years of financial statements, recent results, and support for proposed adjustments. Work with your accountant to document differences between accounting records, tax filings, and bank activity.
Compare value and terms
Clarify whether a valuation refers to the business or its shares, and how debt, cash, and working capital would be treated. Review taxes, expenses, deferred payments, and conditions too: the headline price is not necessarily your net proceeds.
Santa Maria Ventures is an emerging firm seeking to acquire and operate established Panamanian businesses for the long term. To understand our approach as a potential buyer, start a confidential conversation, with no cost or obligation.
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