Define the decision before discussing a number
Are you deciding whether to sell, evaluating an offer or preparing for a negotiation? The same company can raise different valuation questions at each stage. Explain the company structure, proposed transaction, intended readers and deadline. Identify whether the discussion concerns the whole company, selected assets or a particular shareholding. A valuation prepared for one purpose should not automatically be reused for another.
Build a case around transferable performance
A buyer needs to understand what remains after the current owner leaves. Start with consistent monthly trading figures, the cost of replacing the owner’s work and the quality of recurring revenue. Label proposed earnings adjustments separately and retain supporting evidence. Improving a presentation does not improve underlying economics; explain weaknesses as well as strengths.
Our guides to normalised earnings and owner dependence help organise this evidence.
A price bridge makes offers comparable
| Illustrative step | Amount |
|---|---|
| Assumed value of operations | £1,400,000 |
| Cash added under the assumed terms | + £120,000 |
| Debt deducted under the assumed terms | − £320,000 |
| Equity consideration before other adjustments | £1,200,000 |
| Deferred portion included in that consideration | £250,000 |
| Cash at completion before fees and tax | £950,000 |
This hypothetical example assumes a sale of all shares, no working capital adjustment and no other debt-like items. The deferred portion is part of the total consideration, not additional to it. Its timing and conditions matter. Individual proceeds also depend on ownership, rights, transaction costs and tax.
What the valuation engagement should cover
Agree the subject, valuation date, purpose, information request, methods, assumptions, reporting format and intended users before work begins. Explain any third-party reliance needs. Suitability, independence and conflicts are considered before acceptance. A signed engagement should set out what is included, the timetable and how additional work is handled.
A practical first conversation
Tell us what the company does, why you need a valuation, the latest financial reporting date and whether an offer exists. You do not need to submit confidential accounts through this website. We clarify the required work, discuss information and agree the fee before starting.
Check your valuation readiness or discuss a pre-sale valuation →.