Business valuation methods:  
what your company is really worth,  
and how to defend it

Every business owner has an idea of what their company is worth: years of hard work, a multiple heard from a peer, a figure read in the trade press. On the other side of the table, the buyer or investor arrives well equipped — analysts, comparables, models — and the gap between the hoped-for value and the value that can be demonstrated is the leading cause of failed negotiations. An asking price that is too high drives the best candidates away before the first meeting; a poorly supported value leaves money on the table. And the question does not only arise on a sale: bringing in a new shareholder, an owner buy-out (OBO), a gift of shares or a dispute between shareholders all call for a robust business valuation, one that can withstand challenge.

Practitioners cross-check three approaches. Multiples compare your company with comparable transactions or comparable companies — the whole difficulty lies in choosing the right comparables and the right earnings measure. Discounted cash flow (DCF) discounts your future cash flows: sensitive to assumptions, it has the merit of putting your business plan to an objective test and showing what your growth is worth. The asset-based approach (adjusted net book value) comes back into its own for asset-rich companies. The pivot of the whole structure is normalised EBITDA: owner remuneration brought back to market rate, rents, exceptional items, lease restatements — every adjustment must be documented, because every one will be challenged. Finally comes the bridge from enterprise value to equity value — net debt, normalised working capital, surplus cash — where many negotiations tip in the final weeks.

Our work starts in your accounts: adjustments documented line by line, analysis of how recurring your cash flows are, of dependencies (on the owner, on key customers) and of everything the other side’s auditor will examine. We then test the result against transactions actually observed in your segment — not against the multiples of listed companies that bear no relation to an SME — and stress-test the range against the main assumptions. The deliverable is a report you can put on the table: every figure has its source, every assumption its justification, and every foreseeable objection its prepared answer. And when the hoped-for value is not there, we tell you — then we work with you on what can create it before the transaction: it is often the best decision a seller can make.