Frequently Asked Questions (FAQ's) - Business valuation questions answered.

1. How do you value a business?

Valuing a private business is not an exact science. To do it accurately requires experience, industry knowledge and the ability to analyse and closely examine all the factors involved.

The value can be determined by many factors including: grow potential, potential economies of scale, sector trends and activity, cash flow, sustainable profit, asset value, financial history, location, competition, customer base, ongoing management, desirability and the economy.

There are a number of common valuation methods. It is possible to use one or a combination of the following:

• Multiple of earnings - mainly used for businesses with a record of sustainable profits.
• Discounted cashflow - mainly used for large cash-producing businesses.
• Asset value - used for businesses with a large tangible asset base such as property or plant.
• Entry cost method - comparing the entry cost alongside the value of the business.
• Industry precedent - some industries have their own unique valuation methods based on sector criteria.

You can read more on why most traditional or free business valuations are flawed below.

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2. Can you value my business?

We specialise in service, manufacturing, wholesale and distribution businesses. We don't get involved in the licensed trade, retail or fast food and general catering businesses.

Contact us if you want to check or have a specific requirement.

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3. Does it matter if I'm a sole trader, partnership or Limited Company?

No. We conduct valuations for all of them and non-listed PLCs (Public Limited Company).

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4. Who does my valuation report?

All valuations are done by a trained and qualified evaluator. All valuation data is collected, analysed, collated and put together by hand, not randomly spat out by a computer.

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5. Where does the information you use come from?

We have a selection of carefully chosen partners who we use for collecting data. And, we regularly maintain and update probably the country’s most accurate SME deal database. This gives up-to-date deal and industry information which ensures we follow market trends, creating greater accuracy and validity in your report. Your report is designed to withstand the most vigorous professional adviser scrutiny.

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6. Why are most traditional valuations flawed?

Typically, traditional valuations only take into consideration the pure financial aspects of your business such as turnover, profit and balance sheet.

Whilst these are important, you cannot simply ignore other factors such as: industry standard valuation models, previous sector deal precedent, availability of comparative sector opportunities and many more. Each of these can have a dramatic affect on the value of your business.

For example, you and your neighbour's houses are for sale at the same time. You have a double garage, swimming pool or loft conversion while they don’t. It is likely your house will be worth more. Also, if three or four houses in the same street are for sale at the same time, this too will affect the value of your house. It is the same with a business.

The Lucas & Weston BVR is the only valuation report which analyses your sector marketplace and comparative investments. This ensures your business’s value is accurate, reliable and informative.

Understanding how your business is valued can help you create a strategic plan enabling you to create greater value.

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7. How can I profit from having a business valued?

This will depend on the reason for a valuation. Maybe you want to settle a dispute? Perhaps you’re just curious or looking for peace of mind?

Understanding how your business is valued can help you concentrate on the areas where you can add extra value. Often, simple, easily overlooked things can be identified, amended or improved to make a major difference.

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8. Have you valued in my industry before?

We have a 39 year proven track record of valuing and selling businesses. There are few industry sectors left we haven’t valued in. This experience means that your valuation will be accurate and credible.

We regularly undertake work for many accountants and solicitors clients who often need to have an independent opinion to assist with Inland Revenue enquiries.

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9. Do you value leasehold and freehold property?

These are not normally included as they would normally be assessed by a local surveyor or commercial estate agent.

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10. What information do I need to provide?

We will need the last three years certified or audited accounts and any management accounts or forecasts. We will also forward you a straightforward questionnaire to fill in which will cover most of your business operations. Your answers will guide us in doing the best job possible for you. We will also contact you, confidentially, to confirm any outstanding details.

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11. Is it confidential?

Yes. Your report will be sent in a plain envelope marked “Private & Confidential” to the address of your choice. We will only make contact with you as per your instructions.

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12. Do you need to visit my premises?

Site visits are not normally required. So we don’t need to take up any valuable `out of office time’ or raise eyebrows amongst your staff.

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13. How accurate is a valuation report?

Because of the unique and thorough bespoke approach, we have proven accuracy to within 10% either way. This has been proven countless times in the marketplace through successful sales, management buy outs/ins etc.

Whilst not all our clients agree with what we have to say none can argue with the methodology, precision and bespoke approach.

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14. How will I receive my valuation report?

You will receive your report in bound hard copy and can opt to receive it in electronic PDF format too. Further bound copies are available on request.

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15. How much does a valuation cost?

A standard valuation report for a single business usually costs £795.00 + VAT. But, for a limited time only we can offer you a report for just £495 + VAT. Call us now to get started.

That’s a great offer not to be missed. Our competitors charge anywhere from £1,000 to over £12,000. Compare for yourself.

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16. How soon can I get my report?

Typically we allow 3-5 days from receipt of instruction and necessary information requested.

We offer a fast track service if you’re in a hurry or have a deadline to meet, for a modest premium of just £145 + VAT. A fast track valuation is typically completed within 24-48 hours (subject to supply of client information).

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17. Do you offer an update service?

Individual circumstances can change quite rapidly for many businesses. In recognition of this many previous clients take advantage of our previous valuation update service. This is valid and exercisable anytime within a year of valuation and is excellent value at just £179 +VAT.

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18. How do I get started?

Call 0845 644 0266 (lo-call) or 01225 460777 now.

Alternatively click here to get started online.

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