A business valuation determines a company’s fair market value. This value considers various factors, such as future earnings potential, industry benchmarks, and asset value.
It is important because an accurate valuation is crucial for various situations, e.g:
Selling your business
Attracting investors
Estate planning purposes
Mergers and acquisitions
Determining solvency or creditworthiness

Three main valuation approaches are often used in combination for a rounded assessment:
Income approach: This method estimates the value of a business based on its future income potential. Techniques include discounted cash flow (DCF) and capitalisation of earnings.
Market approach: This approach compares your company to similar companies recently sold or publicly traded. It considers key figures such as the price/earnings ratio (P/E) and transaction multiples.
Cost approach: This method estimates a company’s value based on the cost of replacing its assets. Although this method is rare for current businesses, it can be relevant in certain situations.

The timeframe depends on the complexity of your business and the specific valuation requirements. However, a simple valuation can be completed within a few weeks, while more complicated valuations can take several months.

To ensure a comprehensive valuation, you usually need to provide financial reports (profit and loss statements, balance sheets, cash flow statements), business plans, tax returns and all relevant legal documents.

The cost of a business valuation varies depending on the scope of the work, the complexity of the business and the experience of the valuation expert. We recommend that you contact us for a free consultation to discuss your specific needs and receive a customised quote.