1. Preliminary Business Valuations for Owners Planning to Sell

Before asking a new client to commit to using Anderson Shaw we will provide a preliminary valuation of a business at no cost as it is important that our assessment is broadly in line with the owner’s expectations. We believe in providing a realistic estimate so that the owner can plan on a sensible basis. We will carry out a detailed company valuation as part of the work we do to produce the Sale Document.

We specialise in selling manufacturing, engineering and b2b service businesses with annual sales in the range £500k to £7.5M. Unfortunately we cannot help with the sale of shops, hotels, restaurants or similar ‘high street’ businesses.

Please visit the Business Selling Services section of this website for more details or simply contact us.

2. Business Valuation Reports for Departing Shareholders, Separation, M&A Purposes

We provide written, formal business valuations on a day rate basis when these are required for the purposes of shareholder departure, mergers, separations etc.

It normally takes a minimum of 1.5 days to carry out a desk-based valuation of a small uncomplicated business – this allows enough time for us to carry out the necessary analysis of the accounts, gain an understanding of the business from websites, marketing literature etc and also to speak at reasonable length to the owner or responsible director. For larger, more complicated businesses we will do our best to provide an upfront estimate of the time. In larger, more complicated cases it will be necessary for us to visit the business. Our charge out rate is £750 per day plus expenses.

Although there are a number of different approaches as to how to value businesses these are generally founded on the principle of a multiple of the annual cash figure which the business can be expected to generate under new ownership. The first job is therefore to estimate the cash flows adjusted for the costs of new ownership. Adjustments are typically made, for example, for the owner’s salary to bring it into line with the cost of replacing the owner with a manager, or for rent where a business is paying more or less than the commercial rent because the freehold is owned by the business owner. Other factors that need to be considered in the valuation of a business include the level of risk which the business faces (which could therefore impact future cashflows) and the balance sheet structure.

Quote from History: ‘Price is what you pay. Value is what you get.’ Warren Buffett (b. 1930)