There is no 'correct' price for a business. Valuing a business is always an imprecise science, even with large-cap public companies. The right price is one that a willing buyer is prepared to pay and a willing seller is prepared to receive.
Value is, to a large extent, dependent upon who is doing the valuing and for what purpose: for example, a distributor of electrical goods may find that the business is of more value to a related manufacturer than to an unrelated buyer. An industrial manufacturer with five solid customers is likely to fetch a lower price than a similar-size competitor with 50 outlets because its revenue source is less diversified.
There are a number of methods of valuing businesses including: - Comparison based valuations
- Price earnings ratio basis of valuation
- Discounted cash flow
- Net asset value and goodwill
If your business has a turnover of £500k or more and you are interested in receiving a free no-obligation business valuation, please fill in the form below, call us on 020 8875 0200 or email your details. We have a panel of experts covering most sectors who can help you determine the right selling price for your company.
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