Baton Launches Zillow-Style Valuations for Small Businesses
A new platform aims to bring transparency to small business sales with public valuations.
1Zillow for Small Businesses
Baton, founded by a former Zillow executive, has launched Business Profiles, offering free public valuations for 2 million small businesses. The platform ranks businesses locally and provides estimated values, mirroring Zillow's approach to real estate. CEO Chat Joglekar aims to shift small business owners' mindset by making valuation data accessible. The service is designed to combat the lack of awareness about selling options, which often leads to closures instead of sales.
2Boomer Business Handover
41% of U.S. small businesses are owned by baby boomers, representing 2.3 million companies with $10 trillion in assets. Over half lack succession plans, and McKinsey projects 6 million transitions by 2035, worth $5 trillion in enterprise value. Baton targets this demographic shift, framing its competition as the 92% of businesses that close rather than sell. The platform aims to convert this inertia into market opportunity by providing valuation clarity.
3Valuation Challenges
Small businesses lack standardized valuation metrics like real estate's MLS. Baton's estimates use PPP loan data and public records, not private financials, resulting in approximations until owners engage. Zillow's Zestimate has a 7% error rate for unlisted homes, with 99% within 20% of sale price. Baton argues even rough valuations are better than none, citing cases where owners discovered unexpected asset value through preliminary estimates.
4Market Awareness Gap
Baton's CEO identifies awareness, not competitors, as the main challenge. Fewer than 10% of owners can estimate their business's value within 10% accuracy. The platform's free valuations serve as a funnel; if owners decide to sell, Baton manages the process for a fee. Currently closing seven deals weekly, the company has accelerated from 100 total sales reported months earlier, though exact growth metrics require clarification.
5Data-Driven Approach
Baton claims America's most sophisticated small business valuation database, incorporating revenue estimates, team size, customer satisfaction, and comparable sales. Owners can view their business's worth and local ranking without commitment. The company emphasizes that understanding valuation transforms businesses into recognized assets, potentially changing ownership transition outcomes across the U.S. economy.
6Transition Crisis
In 2022, 92% of exiting small/midsize businesses simply closed, versus 5% sold and 3% transferred. Baton positions itself against this trend rather than traditional brokers. The platform's valuation transparency could reduce the information asymmetry that currently discourages owners from considering sales, particularly in the looming
7Business Model
Baton operates on a freemium model: free valuations drive engagement, while actual sales transactions generate revenue through monthly retainers and success fees. After five years, the company has facilitated hundreds of sales. Its growth to seven weekly deals suggests increasing traction, though the small business market's complexity presents ongoing challenges in valuation accuracy and owner education about alternative to closure.
8Industry Impact
By democratizing access to valuation data, Baton could fundamentally alter small business succession planning. The platform's public approach mirrors Zillow's disruptive effect on real estate, though with higher inherent uncertainty. Success depends on whether rough estimates prove actionable for owners and whether Baton can avoid Zillow's prolonged accuracy debates while scaling its database across diverse business types and regions.
Original article: Fortune — Baton Launches Zillow-Style Valuations for Small Businesses