When valuing a business a whole host of factors should be taken into account. Our experienced consultants possess the necessary knowledge, skill and expertise to provide you with guidance about the likely value achievable from your business so that you can decide upon a price to ask from potential buyers.
Key factors - main
Some of the main factors to be taken account in the appraisal of a business include:
Sales, gross and net profits/reconstituted net profits.
Drawings or Director's remunerations/pension contributions, depreciation, loan repayments and interest payments.
Rates of Return on capital employed.
Fixtures and fittings, current capital expenditure and net asset values.
Lease lengths, renewable leases, rents, rent reviews and rates.
Finance availability and the cost of borrowing/interest rates.
Market expectations within the sector.
Valuation multiples within specific markets/knowledge of niche markets.
Changes in market forces.
Rental incomes and yields.
Location and surrounding developments.
Local, Regional and National competition/monopolistic trading positions.
Freehold commercial property values within the area.
Applicable licenses, trading hours and planning permissions.
Current activity within the industry and the geographical locality.
Property and Equipment
Freehold or Leasehold, and condition of the premises.
Extent of trading equipment and state of repair.
Appropriations: goodwill, fixtures and fittings, property and stock at cost values.
Scope, potential and improvements that a new enthusiastic owner may adopt.
Written and verbal agreements/contracts with both suppliers and customers.
Exclusivity agreements patents, obstacles to entry, debtors, creditors, bad debts factoring/invoice discounting charges.
VAT or revenue investigations or staff disputes.
Staff wages, lengths of service, loyalty and key staff.
Key factors - other
Other factors likely to affect the appraisal:
Demand for the type of business.
How long established and customer loyalty.
Handover periods especially if the owner is the key person.
Knowledge of planned vendor exit routes.
Buyer motives and asset/liabilities of a purchaser.
Owner or management run.
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