How much is my business worth?
Business Valuations FAQs
With decades of experience in valuing businesses of all types, professional business valuer Darren Cooper is well placed to answer your business valuation FAQs. Much of Darren’s experience comes from valuing businesses for sale and he is uniquely placed to advise on the true market value of a business.
Here Darren answers the most common FAQs on valuing a company. If you have a question you would like to see included, please email our business valuers on value@mybusinessworth.co.uk
BUSINESS VALUE FAQs
Q: How much is my business worth?
Q: Can I use a business value calculator to value my company?
Q: What factors affect the value of my business?
Q: How do you value a business?
Q: Is there a business valuation formula?
Q: Why do I need a professional business valuation?
Q: How accurate is a business valuation?
Q: How do I choose a business valuer?
Q: Is a business valued on turnover or profit?
BUSINESS VALUATION SERVICES FAQs
Q: How long does it take to get a business valuation?
Q: What information is needed to value a business?
Q: How much does a business valuation cost?
Q: How long is a business valuation good for?
Q: Can I get a business valuation for estate and inheritance planning?
Q: Do you provide business valuations for partner disputes?
Q: How do you value a business for divorce?
Q: Can I get a valuation of my husband’s business?
OTHER BUSINESS VALUATION FAQs
Q: What is the process for valuing a Café or restaurant?
Q: What is the process for valuing a salon?
Q: Are there business valuation multiples by industry?
Q: Can I challenge a business valuation?
Q: How does goodwill affect the value of a business?
Q: Can you value a business that is not profitable?
Q: How can I increase the likelihood of my business selling ?
Q: What is multiple of earnings and how does it affect business valuation?
BUSINESS VALUE FAQs
Q: How much is my business worth?
A: This is dependant on multiple factors including the profitability of the business, its location and other factors. Every business is unique.
Q: Can I use a business value calculator to value my company?
A: You can, but I have never used one that is anywhere close to accurate. They use algorithms based on general principles rather than taking into consideration the uniqueness of your individual business.
Q: What factors affect the value of my business?
A: The business sector, the location, the business accounts, the lease (if applicable) the current Vendors role in the business, the quality and age of the assets, online reviews and the current confidence in the marketplace.
Q: How do you value a business?
A: We use the multiple of profits method but factor in all of the above.
Q: Is there a business valuation formula?
A: Sort of yes, but it varies depending on the industry sector and can then vary further depending on the individual characteristics and assets of the business in question.
Q: Why do I need a professional business valuation?
A: Reasons range from a divorce settlement, taking on or buying out a business partner, or you may be looking at buying a business and want an independent valuation to see if you are paying a fair price.
Q: How accurate is a business valuation?
A: Very, if the valuer is experienced in the actual business sales field.
Q: How do I choose a business valuer?
A: Personal service and experience in the real world of business sales are vitally important.
Q: Is a business valued on turnover or profit?
A: Profit has a far greater bearing than turnover but as discussed above other factors also come into play.
BUSINESS VALUATION SERVICES FAQs
Q: How long does it take to get a business valuation?
A: We can usually provide a draft for your approval in two working days. If we think it will take longer then you will be advised of this at the outset.
Q: What information is needed to value a business?
A: Three years accounts, pictures if it is high street business such as a Café or beauty salon, location details, details of the lease etc. We will notify you of everything that we require.
Q: How much does a business valuation cost?
A: For a standard one premises lock up shop our fee is £250 plus vat. For anything else we will quote based on the extra work involved.
Q: How long is a business valuation good for?
A: Difficult to say as market influences can play a major role, for example sale prices plummeted during Covid.
Q: Can I get a business valuation for estate and inheritance planning?
A: Yes
Q: Do you provide business valuations for partner disputes?
A: Yes
Q: How do you value a business for divorce?
A: In the same way as for any other reason.
Q: Can I get a valuation of my husband’s business?
A: You would need his permission as we would need some sensitive information such as business accounts.
BUSINESS VALUATION SERVICES FAQs
Q: What is the process for valuing a Café or restaurant?
A: Cafés and restaurants are valued based on location, quality of equipment, net profit, role of the Vendor (for example if the Vendor is the head chef in a restaurant and will not be staying on this can have a negative impact on the valuation) on line reviews are also very important in this sector.
Q: What is the process for valuing a salon?
A: Salons are valued based on location, net profit, role of the Vendor in the salon, quality of fixtures and fittings and equipment and online reviews.
Q: Are there business valuation multiples by industry?
A: Yes, there are.
Q: Can I challenge a business valuation?
A: We will give you an indication of where we think your business will land value wise before accepting payment or commencing work on the valuation. That way if our opinion does not suit your purposes there would be no point in you paying for a valuation.
Q: How does goodwill affect the value of a business?
A: Goodwill is an intangible asset. It represents issues such as brand reputation, customer loyalty, employee relationships, online reviews etc. Ultimately it is the difference between buying a Going Concern and starting a business from scratch.
Q: Can you value a business that is not profitable?
A: Yes, but the value will be lower than a business that makes a profit.
Q: How can I increase the likelihood of my business selling ?
A: Ensure that all paperwork including full accounts are up to date. Have a copy of your lease (if applicable) to hand. Encourage loyal customers to post some positive online reviews. Tidy and paint any premises. In short, have all documents available ready for inspection and tie up any loose ends.
Q: What is multiple of earnings and how does it affect business valuation?
A: This is the most common way to value a small business. It is based on using a sector specific multiple of profit.