Selling a business is often the most significant financial decision an owner will make. Whether driven by growth opportunities, personal circumstances, or a planned transition later in life, a successful exit starts with understanding value and planning well in advance.
We support business owners through the valuation and sale process, providing clear, evidence-based assessments of business worth. Our valuations consider both tangible assets and the less visible, but often critical element of goodwill. This includes brand strength, customer relationships, recurring income, reputation, systems, and the extent to which the business can operate independently of the owner.
Goodwill is highly sector-specific. In some industries it is closely tied to contracts and scale; in others, it rests on personal relationships, specialist expertise, or local presence. Understanding how goodwill is created, sustained, and transferred is central to maximising value and ensuring a smooth transition.
Exit and Wind-Down Options
There is no single route to exit. Options vary depending on sector, business structure, and the owner’s long-term objectives. These may include:
A full sale to a third party
A phased exit or partial sale
Management buy-outs or succession planning
Family succession
Gradual wind-down with structured value extraction
For owners approaching later life, a phased approach is often preferable allowing for risk to be reduced over time while preserving income, protecting staff and customers, and maintaining control during the transition.
Sector Insight and Practical Planning
Different sectors attract different buyers and valuation drivers. Professional services, retail, property-based businesses, charities, and owner-managed enterprises each present unique challenges and opportunities. We take sector context into account when advising on timing, structure, and preparation for sale.
Importantly, exit planning is rarely just about the transaction itself. Tax efficiency, personal financial planning, and legacy considerations all play a role. Early preparation allows businesses to become more transferable, reduces reliance on the owner, and positions the business more attractively to potential buyers.
Our role is to bring clarity to the process, helping you understand value, explore realistic options, and make informed decisions that align with both commercial realities and personal goals.
Business Valuation
If you are looking to sell your business, the first thing you must do is value the business.
Business valuation involves gathering relevant information, properly normalising financial statements, identifying intangible assets, analysing business value drivers and risks, developing credible financial projections and then applying an acceptable valuation method.
The three main valuation methods are as follows:
1. Discounted Cash Flow Analysis
This method requires the use of Excel to create a financial model and using this model to carry out an extensive amount of detailed analysis which will allow for the forecasting of the entity’s unlevered free cash flow in the future and discounting it back to today.
This is the most accurate method of analysis but also requires the most amount of work.
2. Comparable Company Analysis
This method involves looking at the value of other similar sized businesses and using comparative figures such as P/E ratio or EV/EBITDA ratio. For example; the value of a share in a certain industry may be calculated using a P/E ratio of 10, in which case if a share has a return of £5, the cost per share in the company would be £50.
This is the most commonly used method of valuation as the data used is current and the calculation involved is relatively simple.
3. Precedent Transactions Analysis
This method compares the company in question to another entity that has recently been sold in the same industry. It uses the price paid for a similar entity in the past as an indication of the price which should be paid for the entity in question.
It is important to note that business valuation must be done in a thorough and objective manner as undervaluing or overvaluing can lead to decisions which have an adverse effect on the entity.
4. Asset-Based Valuation
This approach values a business based on the net value of its assets, rather than its future earnings.
There are two common variants:
Net Book Value – assets less liabilities as shown in the balance sheet
Adjusted Net Asset Value – assets restated to fair market value (e.g. property, equipment, investments)
This method is most appropriate for:
Asset-heavy businesses
Property companies
Investment holding companies
Businesses being wound down or liquidated
It is generally less suitable where goodwill and future earnings drive value.
5. Earnings Multiple / Maintainable Earnings
This method values a business by applying a multiple to sustainable, normalised earnings.
Typically based on:
EBITDA
Operating profit
Post-tax earnings
Key steps include:
Normalising profits for one-off items
Adjusting owner remuneration
Removing non-commercial expenses
The multiple applied reflects sector norms, growth prospects, risk profile, and dependency on the owner.
This approach is widely used for:
Owner-managed businesses
Professional services firms
SMEs where forecast data is less reliable
6. Dividend Discount Model (DDM)
This method values a business based on the present value of expected future dividends.
It is most relevant where:
Dividend policy is stable and predictable
The business has mature, consistent cash generation
In practice, this is more common for listed or quasi-listed entities than private SMEs.
7. Entry / Exit Multiple Method
This method estimates value based on expected exit multiples applied to forecast earnings at the point of sale.
Often used in:
Private equity scenarios
Growth businesses with a defined exit horizon
It bridges forecast performance with market-based valuation assumptions.
8. Rule-of-Thumb / Industry Specific Valuations
Some sectors apply informal valuation benchmarks, such as:
A multiple of turnover
A price per customer or contract
A multiple of recurring revenue
These are not standalone valuation methods, but they can be useful as a sense-check when aligned with commercial reality.
Best Practice in Valuation
In reality, no single method is used in isolation. A robust valuation typically:
Applies multiple methodologies
Adjusts for goodwill and owner reliance
Reflects sector dynamics and market conditions
Considers the purpose of the valuation (sale, succession, tax, dispute)
The final value is a reasoned conclusion, not a formula.
Ultimately, business valuation and exit planning are exercises in foresight, not hindsight. When value is understood early, options widen, risks narrow, and decisions become intentional rather than reactive. The strongest outcomes are achieved by owners who treat their exit with the same rigour and care that went into building the business.