Valuation and structuring
How do I value a business ?
After finding the right target business, a business valuation is the first stage in starting the process of negotiation on the final purchase price of a business.
There are many valuation methodologies but for the SME market and more specifically, those businesses with ebitda (earnings before interest, tax, depreciation and amortisation) of less than £1m, then the “multiple of ebitda” method is probably the most relevant.
The range of multiples used is typically but not exclusively between 3-6 times. This means that a business can be valued based on its annual profit (after being adjusted for any current owners discret