How to Increase Your Real Business Value

For three weeks, you’ve been building the pieces to improve your realistic business value:

First week: Your normalised EBITDA (£850k)

Second week: Your risk factors (-3.5x discount)

Third week: Your sector positioning (5.9x base multiple)

This week, we put it all together into your complete Exit Value Report—the “E” in F.A.C.E.

Then we build your action plan to close any gap between what you have and what you need.

Why Three Numbers, Not One

Most business owners want one clean answer: “My business is worth £X.”

But professional valuations don’t work that way.

According to Lansley Commercial’s analysis, actual sale prices are typically 85-90% of asking prices, with most small businesses selling for 1.5x to 3x adjusted earnings.

There’s a range because valuations depend on:

• Who’s buying (strategic buyer vs financial buyer)
• When you sell (market timing)
• How well you negotiate
• What structure you accept (cash vs earnout)
• How desperate or patient you are

Smart owners calculate three numbers:

Low: Worst-case realistic scenario Mid: Most likely outcome High: Best-case with everything aligned

Calculating Your Low Value

This is conservative. Maximum risk discounts. Bottom of sector range.

Your Inputs:

EBITDA: Use your lowest year from the three-year average, or apply 10% haircut to average for conservatism.

Your three-year average: £850k Conservative approach: £850k × 0.9 = £765k

Multiple: Take all risk discounts fully, use bottom of sector range for size-based positioning.

Your base multiple (bottom of range for size): 3.5x Your full risk discount: -3.5x Low multiple: Max(3.5x – 3.5x, 1.5x) = 1.5x

(We don’t go below 1.5x as that’s the floor for most small businesses per Lansley data)

Low Value: £765k × 1.5x = £1,147,500

This is “if everything goes wrong in negotiation” value.

Calculating Your Mid Value

This is realistic. Expected risk discounts. Middle of your positioning range.

Your Inputs:

EBITDA: Three-year average as calculated £850k

Multiple: Risk discounts as assessed, mid-point of your adjusted range.

Your base multiple (mid-point): 4.5x Your assessed risk discount: -3.5x Mid multiple: 4.5x – 3.5x = 1.0x…

Wait. That’s too low. Let’s recalculate more realistically.

Looking back at Week 2, your risk assessment was:

• Owner dependency: -1.0x (moderate)
• Customer concentration (49%): -0.8x
• Systems documentation: -0.3x
• Management team gaps: -1.1x
• Financial reporting: -0.3x

Total: -3.5x was cumulative.

But in reality, you’d address some of these before sale. Let’s assume partial improvement:

Realistic Assessment After 12 Months Work:

• Owner dependency: -0.6x (improved from -1.0x)
• Customer concentration: -0.6x (reduced from -0.8x)
• Systems: -0.2x (improved from -0.3x)
• Management: -0.7x (improved from -1.1x)
• Financial reporting: -0.1x (improved from -0.3x)

Improved Risk Discount: -2.2x

Mid multiple: 4.5x – 2.2x = 2.3x

Mid Value: £850k × 2.3x = £1,955,000

This is “realistic outcome with preparation” value.

Calculating Your High Value

This is optimistic but achievable. Minimal risk discounts. High end of positioning.

Your Inputs:

EBITDA: Best trailing year, or apply modest 5% growth projection £850k × 1.05 = £892,500

Multiple: Top of your sector range with minimal risk discount (assuming 18-24 months of dedicated improvement)

Your base multiple (top end): 5.5x

Risk Discount After 24 Months Dedicated Work:

• Owner dependency: -0.3x (near-eliminated)
• Customer concentration: -0.4x (reduced to 25%)
• Systems: -0x (fully documented)
• Management: -0.3x (strong team built)
• Financial reporting: -0x (professional dashboard)

Minimal Risk Discount: -1.0x

High multiple: 5.5x – 1.0x = 4.5x

High Value: £892,500 × 4.5x = £4,016,250

This is “everything aligned, well-prepared exit” value.

Your Complete Valuation Range

Low (conservative, current state): £1,147,500 Mid (realistic, 12 months prep): £1,955,000 High (optimistic, 24 months prep): £4,016,250

Current to High Gap: £2,868,750

That’s the value sitting on the table if you systematically address risk factors over next 24 months.

The Gap Analysis Framework

Now compare your range to what you actually need.

Your Retirement Target: £3,500,000 (after tax)

Tax Calculation:

Assuming Business Asset Disposal Relief (BADR) applies to £1m at 14%, remainder at 24%:

On £4,016,250 sale:

• First £1m at 14% = £140,000 tax
• Remaining £3,016,250 at 24% = £723,900 tax
• Total tax: £863,900
• Net proceeds: £3,152,350

Your high scenario gets you to £3.15m net—close to your £3.5m target, but not quite there.

Here’s Some of Your Options:

1: Increase EBITDA through growth Current: £850k Needed for £3.5m net: ~£950k EBITDA at 4.5x multiple

2: Improve multiple through risk reduction Current best: 4.5x Needed: 4.8x (requires getting into premium range)

3: Adjust retirement target £3.15m may be sufficient with adjusted planning

4: Combination approach Modest EBITDA growth + maximum risk reduction

The 12-Month Priority Action Plan

You can’t fix everything at once. Prioritise based on ROI.

Priority 1: Customer Concentration (Months 1-6)

Current Impact: -0.8x multiple = £680k value lost

Goal: Reduce top 3 from 49% to under 30%

Actions:

• Identify 10 target prospects in £200-400k revenue potential range
• Launch focused business development campaign
• Allocate budget: £50k for marketing/sales
• Hire business development resource if needed
• Target: Add 5 new customers at £250k average by month 12

Expected Improvement: -0.8x to -0.5x = £255k value added

Priority 2: Management Team Development (Months 1-12)

Current Impact: -1.1x multiple = £935k value lost

Goal: Build clear second-in-command and strengthen leadership

Actions:

• Identify or hire second-in-command (Months 1-3)
• Develop succession plan for your role (Months 4-6)
• Hire financial controller if needed (Months 4-6)
• Build sales leadership capability (Months 6-12)
• Test independence: Take 4-week absence in Month 11

Expected Improvement: -1.1x to -0.6x = £425k value added

Priority 3: Owner Dependency Reduction (Months 1-12)

Current Impact: -1.0x multiple = £850k value lost

Goal: Document processes, delegate decisions systematically

Actions:

• Document 48 decision frameworks (4 per month)
• Delegate 48 decisions completely (4 per month)
• Build operations manual (ongoing)
• Transfer customer relationships (ongoing)
• Implement weekly 80/20 time audit

Expected Improvement: -1.0x to -0.5x = £425k value added

Priority 4: Systems Documentation (Months 6-12)

Current Impact: -0.3x multiple = £255k value lost

Goal: Comprehensive documentation of all critical functions

Actions for Results:

• Create operations manual template (Month 6)
• Document sales process completely (Month 7)
• Record your delivery process (Month 8)
• Define and document customer service (Month 9)
• Document financial management (Month 10)
• Complete and test documentation (Months 11-12)

Expected Improvement: -0.3x to -0.1x = £170k value added

Priority 5: Financial Reporting (Months 6-9)

Current Impact: -0.3x multiple = £255k value lost

Goal: Professional-grade management reporting

Actions:

• Implement monthly management accounts (Month 6)
• Build KPI dashboard (Month 7)
• Add budget vs actual reporting (Month 8)
• Implement customer/product profitability (Month 9)

Expected Improvement: -0.3x to -0x = £255k value added

The 12-Month Value Improvement Projection

Starting Position (Month 0):

• EBITDA: £850k
• Multiple: 2.3x (with -3.5x risk discount)
• Value: £1,955,000

After 12 Months (Assuming Action Plan Execution):

• EBITDA: £875k (modest 3% growth)
• Risk discount improved: -2.0x (from -3.5x)
• Base multiple: 4.5x
• Adjusted multiple: 2.5x
• Value: £2,187,500

Value Improvement: £232,500 in 12 months

After 24 Months (Full Execution):

• EBITDA: £920k (8% growth from current)
• Risk discount: -1.0x (significant improvement)
• Base multiple: 4.8x
• Adjusted multiple: 3.8x
• Value: £3,496,000

Total Value Improvement: £1,541,000 over 24 months

Your Week 4 Action Plan

This week, complete your Exit Value Report and build your roadmap.

Monday (2 hours): Calculate your three-number range (low/mid/high) using the frameworks above.

Tuesday (2 hours): Complete gap analysis. What’s the difference between your high value and what you need?

Wednesday (3 hours): Build your 12-month priority action plan. Pick top 3-5 priorities based on ROI.

Thursday (2 hours): Create monthly milestones for each priority. What happens Month 1? Month 6? Month 12?

Friday (1 hour): Schedule the first action items in your calendar. Not “someday”—actual dates.

Weekend: Review everything. Do you believe you can execute this plan? What obstacles will you face? Is there any help you need?

What You Have Now

After four weeks of F.A.C.E., you have:

✅ Normalised EBITDA (3-year average)

✅ Risk assessment with quantified discounts

✅ Sector positioning with base multiple range

✅ Three-number valuation (low/mid/high)

✅ Gap analysis vs target

✅ 12-month priority action plan

✅ 24-month value improvement projection

This is professional-grade work. You didn’t pay £10,000 for a formal valuation, but you’ve done the analysis yourself.

Now comes the hard part: execution.

According to Brentwood Growth’s research:

“Most successful transitions show measurable improvements after 18-24 months of consistent effort.”

Source: Brentwood Growth, How to Reduce Owner Dependency & Increase Business Value Before a Sale, 2025

You have the roadmap. Next 24 months determine whether you exit at £1.95m or £3.5m.

That’s £1.55 million sitting on the table.

Are you going to leave it there?

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.