Free business valuation. What is your business worth?
Most owners find out at the worst possible moment, when someone else has already put a number on the table. Finding out early costs you nothing and changes every decision that follows.
An honest figure, not a flattering one.
Instant online calculators are lead capture forms wearing a suit. Nobody has looked at your accounts, your contracts or your customer list, so the number means nothing.
If you want a rough bracket before speaking to anyone, our valuation calculator and adjusted EBITDA calculator will get you there in a few minutes, with the reasoning shown.
What we do is slower and more useful. Someone who sells businesses for a living looks at yours and tells you what a buyer would realistically pay, and why. Sometimes that is more than owners expect. Often it is less, and knowing that early is worth considerably more than a comfortable guess.
You are not committing to anything. Most people who ask are not ready to sell. Some are three or four years out and want to know what to fix first. That is a sensible use of a valuation.
Most trading businesses sell between 4x and 10x
Where yours sits is decided by the things below, not by its turnover.
Illustrative. A handful of sectors sit outside this range entirely, in both directions.
How the number is worked out.
No mystery to it. Almost every trading company in the UK is valued the same way, and it is worth understanding before anyone quotes you a figure.
Start with profit
Buyers price profit, not turnover. The starting point is EBITDA: earnings before interest, tax, depreciation and amortisation.
Adjust it
Add back what a new owner would not carry: an above market director’s salary, the car, personal costs, one off fees. Adjusted EBITDA is almost always higher than the figure in your accounts.
Apply a multiple
The multiple reflects how risky and how attractive those earnings are. Contracted income and a management team earn more than the same profit run through three clients and one owner.
Adjust for cash and debt
Deals are agreed cash free and debt free. This is where a headline price and the money that reaches your account part company.
A worked example
Illustrative only, using round numbers. Your figures will be different.
| Operating profit per the accounts | £1,700,000 |
| Add back: owner costs and one off fees | £300,000 |
| Adjusted EBITDA | £2,000,000 |
| Multiple applied | 5.0x |
| Enterprise value | £10,000,000 |
| Add: surplus cash | £800,000 |
| Less: bank and asset finance debt | (£1,200,000) |
| Indicative equity value | £9,600,000 |
Why the headline price is not the cheque
The gap between the two catches out more sellers than any other part of a deal.
Surplus cash comes back to you, borrowing comes off, and the business is handed over with a normal level of working capital in it.
What moves the number up and down.
Two businesses making identical profit can be worth very different amounts. Most of this list is fixable, which is why getting a valuation early is worth more than negotiating harder later.
Pushes the multiple up
- Recurring or contracted revenue rather than one off projects
- A broad customer base with no single client dominating
- A management team that runs the business without you
- Accreditations or approvals a buyer cannot easily obtain
- Active trade buyers already acquiring in your sector
Pulls the multiple down
- One customer accounting for a large share of revenue
- The owner holding the key relationships and knowledge
- Profit that jumps around year to year with no clear reason
- Leases or contracts that do not transfer on a sale
- Unresolved disputes, HMRC issues or messy records
What happens next is up to you.
We come back with the figure and the reasoning behind it. From there, three sensible directions, and we are equally happy with all of them.
- Nothing is marketed and nobody is approached without your say so
- Your staff, customers and competitors hear nothing
- No cost and no obligation at any point
A valuation is still an opinion until a buyer agrees with it. Our 30 day market test puts the business in front of real acquirers to see whether the appetite is there, with your money back if it is not.
Three routes from here
All three are fine by us. Most owners take the first.
- 1Do nothingYou know where you stand. Come back when it suits.
- 2Work on the numberFix the two or three things holding the multiple down.
- 3Test the market30 days in front of real acquirers, money back if the appetite is not there.
Nothing happens without your instruction at every stage.
Business valuations, answered.
How much does a valuation cost?
Nothing, and there is no obligation afterwards. A good proportion of the owners we value businesses for come back to us later, sometimes years later. That is a fair trade.
What information do you need from me?
The last three years of accounts, your current management figures, and a conversation about what the accounts do not show: how revenue is won, which customers matter, and what you personally do day to day.
Is a valuation the same as what I will actually get?
No, and anyone who tells you otherwise is selling something. A valuation is an informed view of what the market should pay. The price is whatever a specific buyer agrees to, and that depends on how badly they want it and how many others are interested.
Will anyone find out I have asked?
No. Valuations are confidential. Nothing is marketed, no buyer is contacted and no details leave us without your explicit instruction.
Find out what your business is worth.
A few details to start with. We will come back to talk through the figures properly, and everything stays confidential.
- A real person gets back to you, not an automated report
- No cost, and no obligation to go any further
- Useful whether you are selling next year or in five
Request received
Thanks. A member of the team will be in touch.