How to Value Your Lemonade Stand for Prenup Disclosure

justprenups.com • January 30, 2026

Regardless of what your business is, we offer the following information for valuing your business.

Regardless of what your business is, we offer the following information for valuing your business (unless you consult a professional appraiser). For the guidance in this document, all businesses are lemonade stands in honor of the early entrepreneurial spark in all of JustPrenups’ clients who are business owners.

 

JustPrenups has a guiding principle regarding business valuation: ask your CPA or tax preparer or financial advisor what the value of your business is, and ask your professional to provide that information to you in writing with supporting documentation. 

 

Otherwise, for disclosure, you may determine which method of valuation fits your business best. Depending on your business, you may need to look for a method beyond what is listed below, as the list below is not exhaustive. Instead, this brief lists provides an overview to highlight common methods:

 

Earnings-Based Value: Look at what your lemonade stand makes each year. This method is known as either the “Seller’s Discretionary Earnings” or “EBITDA multiple.” Google and/or AI tools - for free - may help you to apply this method, and there may already be tools available on different business schools’ websites.

 

Market-Based Value:  Compare it to other lemonade stands. Use real sales data from similar businesses in your industry. If other lemonade stands just like yours sold for $500, then yours is probably worth about the same — unless yours has an unusual recipe, appears on a great intersection, or gets extra sprinkles from a secret supplier.

 

Asset-Based Value:  Add up what it owns. Total your all assets using their current fair market value (“FMV” – the amount you would likely receive if you sold the asset today), and then subtract the debts. This method is another way of saying, “What is all this stuff worth if we just sold the parts?”

 

Discounted Cash Flow (“DCF”):  Ask how much profit the business will make later. Estimate future earnings and discount them back to today’s dollars. To clarify this one, if your lemonade stand will provide $10 in profit over the next five years, figure out how much that amount is worth today.


Cost-to-Create Method:  Ask what would it cost to build your business from scratch. Total how much it would cost to rebuild or to replicate the business – and really think about all the moving parts of your business that would be replaced at today’s FMV cost: its assets, its infrastructure, its trademarks, its client list, and more, such as the cost of training personnel at the level to which they’re currently trained and paying them. 

 

Let’s say your lemonade stand would cost $300 today if you needed to buy all the stuff and to teach someone to make lemonade like you do. You have that knowledge, and you know what to buy and where to go. What might your stand be worth to someone starting from nothing? In other words, what would it take to make another business just like this business?

 

To summarize each of the methods above: 

  • Earnings show how much money you make.
  • Assets show what you own.
  • Market comps show what others are paying.
  • Future cash flow shows what someone might earn later.
  • Build-from-scratch cost shows what it would take to start fresh.

 

Businesses are like people — they can be complicated and appear differently from different angles. You may need to consider if just one method will be sufficiently thorough for your type of business in order to provide a reliable picture of your business’ current worth.

 

Be able to explain why you chose a particular valuation method over others, such as why a given method is a good fit for a certain industry.

 

Remember why you’re valuing this business in the first place. 

 

Ask yourself:  Would a judge who has been asked to set aside my Prenuptial Agreement evaluate my disclosure and conclude that I provided an accurate snapshot of my business’ financial standing and its value? 

 

Would a judge find the information I provided about this business, including how I valued it (i.e., the method chosen for valuation), to be a sufficient basis for my partner to say, “I understand the value of this business and still choose to execute the Agreement that changes my right to the growth of this business”?

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