Strategies for the Best Business Valuation

Business valuation, from a business-owners perspective, is an emotional subject. It’s
easy to ‘Google’ the concept of valuing a business and often you can get a rough idea of
your value using a basic industry standard formula.  What are the strategies for getting the BEST valuation for your business?

What’s It Really Worth?

Most of these relate to open market sales for listed companies where publicly available data is used. The reality is that these methods cannot give an accurate value in many cases
for privately held companies.

In conversations with business owners looking to sell, I always ask “Do you know what
it’s worth today?” The most common answer is to a completely different question, which is
“I’m not selling for less than £x million”. With no idea what their business is worth in the
market, it is common for owners (especially founders) to apply a rule of sacrifice value i.e.,
how much of myself, my time and sacrifice have I put into this business?

The bad news is buyers don’t care about any of that. They only care about their return
on investment and their attitude towards risk.

The Reality Check on Your Business Valuation

A professional valuation before you go to market is essential so that you can have a realistic idea of where bids are likely to come in. It helps you manage your expectations in the process. If you think your business is worth £20m but all the evidence points toward a £2m valuation, there is going to be a lot of wasted time and money trying to find a buyer that pays the expected price.

“Visibility without value is vanity.” – Bernard Kelvin Clive

A valuation starts with your year-end numbers.

Those alone will not get your business sold.

With value expectation gaps you’d be better spending your time and effort getting help
with how to grow it to match your financial needs. You can’t decide when to sell unless you
know the value of your business today. Equally you can’t focus on the right value building
activity if you don’t know what impact it has.

When a buyer is valuing your company, they look at every aspect of your business
including an assessment of:

• Business operations
  Financial reporting
• Your role in the business
  Customer concentration
  The team
  Risks inherent in your business and industry
  How you perform against your competitors

Hundreds of other criteria are reviewed depending on what they are looking to achieve
in the acquisition of your entity.
The great news is you can get a business valuation quickly, easily and very cost effectively.
Book in a 30 minute call with me and see how easy it is.
“Visibility without value is vanity.”
Bernard Kelvin Clive

Is your business saleable and exit ready for you to leave it (no matter when it happens)? Click to to get Christine’s free Exit Ready Checklist the expert in making sure your business is saleable for more money and on better terms.   Christine helps you get out of the day-to-day, guides you through the handover of controls and gets you and your businesses exit ready so you can enjoy a happier, richer future.  She saves you THOUSANDS so you can increase the value of your businesses by MILLIONS.