Selling Your Business
The tax structuring, preparation and deal support behind a sale, so the amount that reaches your bank account is as close as possible to the number you agreed.
Learn more →
Corporate finance
Business Valuations
Most owners find out what their business is worth at the worst possible moment: when someone else has already put a number on the table. Knowing earlier changes what you can do about it.
Why owners get a valuation
- You are thinking about selling, and want to know whether the number in your head is realistic before you talk to anyone.
- Someone has approached you. Unsolicited offers are flattering and frequently low. You need an independent view fast.
- You are bringing someone in, whether a manager, a family member or an investor, and shares have to change hands at a defensible value.
- A share scheme, such as EMI options, needs a valuation that will stand up to HMRC.
- A relationship has ended, in business or in marriage, and the business has to be divided.
- You simply want to know. For many owners the business is the biggest asset they will ever own, and they have no idea what it is worth.
What we look at
The starting point is the profit a buyer can actually rely on. That is rarely the figure at the bottom of your accounts, so we adjust for one-off costs, above or below market director remuneration, personal expenses running through the business, and anything else that would not survive a change of ownership.
Then we look at the things that move the multiple:
- How predictable the revenue is, and how much of it is contracted or recurring
- Customer concentration: one client at 40% of turnover is a discount, not a strength
- How dependent the business is on you personally
- The quality of the records, because a buyer discounts what they cannot verify
- What comparable businesses in your sector have actually sold for
The useful part: what would move it
A number on its own is of limited use. The valuable output is the list of things that would make the business worth more, and how long each would take. Reducing owner dependency, converting ad hoc work to contracts, cleaning up the balance sheet and getting three years of clean, consistent accounts together are all achievable, and all of them raise the multiple rather than just the profit.
That is why we would rather value your business three years before you sell it than three weeks before.
Ready to find out? Get in touch for a confidential conversation, or read about exit and succession planning if a sale is still some way off.
Common questions
How do you value a business?
Usually on a multiple of sustainable profits, cross-checked against the asset position and, where the earnings profile justifies it, discounted future cash flows. The multiple depends on the sector, the size, how predictable the earnings are, and how much of the business walks out of the door when you do. We show the workings so the number can be defended, not just asserted.
What is a realistic multiple for a small business?
Wide enough that any figure quoted without seeing your accounts is guesswork. Owner-managed businesses commonly change hands at a low single-digit multiple of adjusted profits; strong recurring revenue, a real management team and long contracts push it up, while dependence on the owner or one big customer pushes it down hard. We will give you a range for your business and explain what sits behind it.
Is a valuation the same as what I will actually get?
No, and anyone who says otherwise is selling something. A valuation is a defensible view of worth. A price is what one specific buyer will pay on a specific day, and it is affected by how badly they want it, how the deal is structured, and how much is deferred or conditional. A valuation tells you whether an offer is reasonable and where to push.
Can you value shares for a share transfer or a share scheme?
Yes. Minority holdings, share transfers between family members, valuations to support an EMI share scheme, and valuations needed for probate or a shareholder dispute. These often need different assumptions from a whole-company sale valuation, particularly around minority discounts.
More corporate finance
Exit & Succession Planning
The two to five years before you leave, used properly: reliefs protected, the business made saleable, and a plan for who takes it on.
Learn more →Buying a Business
Financial due diligence, affordability modelling and deal structuring, so you find out what you are actually buying before you sign.
Learn more →Management Buyouts
Selling to the people who already run it: structuring a deal the management team can afford and the outgoing owner is happy to accept.
Learn more →Raising Finance
Forecasts, business plans and lender packs that stand up to scrutiny, plus a clear-eyed view of what your business can actually afford to borrow.
Learn more →
What this service is. Tax and accounting work connected with
a transaction: valuations, tax computations and structuring, financial
modelling, due diligence reporting, preparing your records and figures, and
working alongside your solicitor and other advisers. Tax treatment depends on
your circumstances and can change.
What it is not. We do not advise on the merits of buying or
selling shares or other investments, and we do not arrange or broker
investments or finance. Where you need that, we will tell you and you should
take advice from a firm authorised or licensed to give it.