What Is My Business Worth?
What Is My Company Worth?
A Clear Guide to Understanding Valuation
The Big Question Everyone Asks – “What is my company actually worth?”
The honest answer? – It’s worth whatever a buyer is willing to pay.
While this is technically true, it’s not very helpful if you’re planning an exit. A more useful question is:
How will a buyer decide what my company is worth?
Understanding how buyers think, what they measure, and how they compare opportunities is essential if you want to maximise value. Once you understand that, you can start influencing the outcome.
How Buyers Typically Assess Value
M&A professionals use a range of valuation methods. Most begin by choosing a financial benchmark – usually profit, revenue, or assets – and applying a multiple to it to determine an estimated value.
Common valuation methods include:
- EBITDA multiples – the most widely used method
- Discounted Cash Flow (DCF) – valuing future cash in today’s terms
- Internal Rate of Return (IRR) and Accounting Rate of Return (ARR) – the return a buyer expects over time.
- Times revenue method – popular in certain sectors such as SaaS and tech
- Asset-based valuation – where physical assets drive value
- Equity value vs. enterprise value – what buyers pay vs. what shareholders receive
Each method tells a slightly different story, and buyers will select the one that best aligns with their strategy, risk appetite, and the sector you operate in.
Different Sectors Use Different Metrics
Not all industries follow the same rules. Some rely heavily on recurring revenue, others on asset value, and some on pure customer numbers. For example:
- Saas and Software companies: often priced on Annual Recurring Revenue (ARR)
- Pharmacies: prescription volumes carries weight
- Insurance brokers: multiples of fee income
- E-commerce: customer lifetime value (LTV) and acquisition cost (CAC)
- Manufacturing: asset values and capacity utilisation
- Professional services: contract terms and recurring workloads
Understanding the norms within your sector gives you a sensible starting point… But it’s not the finish line!
Presenting Your Company in the Best Possible Light
Once you understand the framework buyers use, the next step is positioning your organisation in a way that maximises perceived value.
- Build strong financial reporting
Buyers want clarity.
They want clean accounts, reliable management information, and numbers that make sense. A tidy balance sheet, accurate forecasting, and up-to-date trading data make your company far more attractive.
- Know your key metrics
Every sector has its own KPI set.
Buyers expect you to know yours, and if you can demonstrate them clearly and consistently, you instantly appear more credible.
- Demonstrate growth that feels real and repeatable
Growth matters, but quality of growth matters more.
Short-term spikes raise eyebrows. Steady, predictable trends raise valuations.
What Really Drives Value?
Financial results are only part of the story. Once buyers dig deeper, they look at factors that influence the company’s long-term stability and scalability. Here are some of the biggest value drivers:
- A diverse, loyal customer base
- Recurring or contracted income
- Intellectual property and barriers to entry
- A management team that can run the company without the founders
- Strong operational systems and processes
- Unique market position or scarcity value
And here’s a key point many owners miss:
These factors don’t just affect the valuation – they affect the deal structure too.
A company with high recurring revenue may receive more cash upfront, whereas a company heavily reliant on the founder may face more earn-out or deferred elements.
The Truth About Valuation
Desktop valuations are helpful but limited. They provide a starting point, not an answer.
The real value only emerges in a competitive, well-managed sale process
When multiple buyers with different motives assess the same opportunity, valuations can diverge dramatically.
It’s not unusual to see 2-3x differences between the lowest and highest offers.
That’s why preparation, positioning, and having the right buyers in the room makes all the difference.
Your First Step Toward Understanding Value
If you’d like an initial view of what your company could be worth, we’re happy to offer a confidential, no-obligation call with one of our directors. Based on hundreds of successful transactions over the past 20 years, we’ll give you honest and actionable insights.
You’ll receive:
- A realistic early valuation range
- Insight into buyer expectations in your sector
- Honest, actionable steps to improve your value before going to market
Or, if you prefer to explore on your own first, you can download our guide:
“How to Value a Business – Navigating the Complex World of Corporate Finance Valuations.”
It’s a clear, practical resource designed to give you confidence before you step into sale planning.
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FAQs – Selling Your Company
What is the best way to sell a business in the UK?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell a business in the UK?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell a business?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…