How much is your business worth? An owner’s guide to valuation

Most owners only think about valuation when they are about to sell. That is late. Your valuation drives exit planning, shareholder buy-outs, probate and divorce settlements, share schemes and disputes — and knowing it early lets you improve it.

The three main approaches

• Earnings multiples — maintainable profit × a sector multiple; the most common for profitable trading businesses
• Discounted cash flow — future cash flows brought back to today’s value; best for predictable, growing businesses
• Asset-based — net assets adjusted to market value; the floor for asset-heavy or low-profit businesses

What drives the multiple up — or down

• Recurring, contracted revenue beats one-off sales
• Owner dependence — if the business needs you daily, it is worth less
• Customer concentration — a single customer over ~20% of revenue is a discount
• Clean, credible management accounts — buyers pay for evidence, not optimism

Increase the value before you sell

The highest-return work happens 12–24 months before a sale: strengthening recurring revenue, documenting systems, building a management team, and presenting two to three years of clean accounts. We provide independent valuations and a practical plan for improving the number — fixed fee, plain English, and honest about weaknesses.