What buyers actually pay for, and what they discount

Two businesses with the same profit rarely fetch the same price. The difference is risk: how much of the revenue is contracted or retained, how many clients carry it, whether the company runs without its founders, and whether the claims it makes about itself can be evidenced.

Our assessment scores ten of those factors, weighted against what buyers told us they value most in an acquisition target: revenue growth, revenue visibility, differentiation, proposition and evidence, client concentration, client retention and growth, profitability, management depth, people and culture, and scalability, technology and controls.

The weightings are not equal, because buyers do not weigh them equally. Answering honestly is worth more to you than answering well.

Why a business valuation calculator cannot tell you what a buyer will pay

Type your turnover into an online business valuation calculator and it returns a multiple. That is a useful starting point and nothing more, because a calculator cannot see the things that actually move the price: the client who carries too much of the revenue, the contract that renews at your client's option, the fact that every senior relationship still runs through you.

Those are the details an acquirer's advisers find in diligence, and they are the ones that change the number, or end the process.

We built this assessment to look where a calculator cannot. It does not produce a valuation, and we would be wary of any free tool that claimed to. It tells you how a buyer is likely to read your business today, and which of the ten factors is costing you the most.

Exit planning starts long before you sell

Much of what a buyer will pay is decided long before anyone is at the table. Exit planning is simply the work of making a business easier to buy: reducing what depends on the founders, making revenue more predictable, tidying the contracts, and being able to evidence what you claim.

Done early, that is ordinary good management and it improves the business whether you sell or not. Done in the last month before a sale, it reads to a buyer as a reason to retrade.

Exit readiness is not a decision to sell. It is knowing where you stand before you have to choose.

The advisers behind the assessment, in London and working across the UK

We are a boutique UK M&A and growth advisory, registered in Maidenhead and operating from London, at 167-169 Great Portland Street. We work with founder-led marketing, technology and data businesses across the United Kingdom, whether they are preparing to sell, planning to buy, raising capital, or simply want an honest read on where they stand.

Our partners have built and run businesses themselves. The ten factors in the assessment, and the weight given to each, come from our own research into what buyers say they value, not from a generic template.

Questions founders ask before they start

A short list of the things founders ask us before they take the assessment, and the honest answers.

Ready to talk it through with an adviser?

The assessment is the quickest way to start the conversation. If you would rather just talk, that works too. Tell us where you are and what you are weighing up, and we will give you a straight view of your options, whether or not there is a deal in it for us.

What you get at the end of the ten questions