A valuation is an informed estimate of the value of a business, usually based on its earnings, assets, growth, risks and how dependent it is on its owner. Different methods and different assumptions give different answers, so a valuation is better understood as a range than a single number.
Owners use valuations to plan: to see what drives value, what holds it back and what to improve before any sale. It is not financial advice, and it does not promise what a buyer will pay. Actual prices depend on the market, the buyer and the negotiation. Clear records and documented processes generally help.