FAQ
Business valuation FAQ
The questions UK SME owners ask us most often, with straight answers.
How is a UK business actually valued?
Professional valuers triangulate three methods on every report: a normalised-EBITDA earnings multiple as the primary lens, a net asset valuation, and a discounted cash flow as a cross-check. For most trading SMEs the earnings multiple dominates, but the other two exist to test it. A single method used in isolation is not a valuation, it is a guess.
What EBITDA multiple should I expect for my UK SME?
As a broad guide, owner-managed service and retail businesses trade at 2x–4x adjusted EBITDA, established B2B services and specialist trades at 4x–6x, and recurring-revenue software and specialist healthcare at 6x–8x or higher. The actual figure depends on growth, customer concentration, owner dependence and buyer type — the range is a starting point, not the answer.
How much does a professional business valuation cost?
The Business Valuers charges a fixed fee, typically £495, for a bespoke written valuation, quoted before any work begins. The wider UK market runs from £2,000 to £10,000+ for a formal report. Our fee is fixed because there are no commissions, no success fees and no incentive to push the number in either direction.
How long does a valuation take?
We deliver the written valuation within 72 hours of receiving your financial information — usually the last three years of accounts plus current management figures. Most other firms quote two to four weeks. The pace matters because the moments that call for a valuation, from a buyer approach to an HMRC deadline, rarely leave room to wait.
Can my accountant value my business?
Your accountant prepares your accounts and tax, which is a different discipline from independent valuation, and they are not independent of the business either. Most accountants refer valuation work to a specialist for exactly that reason. Several of the firms we work alongside refer their clients here rather than take the work on themselves.
Will HMRC accept the valuation?
HMRC does not pre-approve most valuations, but a report prepared on a recognised basis with the evidence documented in full is far less likely to be challenged, and far easier to defend if it is. Our reports set out the methodology to the standard HMRC expects for share transfers, EMI, gifts, CGT and probate.
Are free online business valuation calculators accurate?
No. Calculators apply a generic multiple to headline profit and ignore the normalisation adjustments, sector data and risk factors that drive a real number. They are a rough sense check at best — not something to negotiate with, file with HMRC or rely on in a dispute. Every party that matters knows the difference.
Why do brokers offer free valuations?
Because the valuation is a sales tool, not an independent opinion. The figure's job is to win the instruction — either flattering you into signing or pitching low to turn a quick deal. An independent valuation costs a fee precisely because it has no stake in the outcome. That is what gives the number weight.
What's the difference between a market valuation and an HMRC valuation?
A market valuation aims at the best realistic buyer; an HMRC valuation uses the statutory hypothetical purchaser basis with case-law adjustments, including discounts for minority shareholdings, and typically produces a lower figure. Both are legitimate — they answer different questions, and using one where the other is required creates problems.
What is a Form E business valuation?
Form E is the financial statement filed in English and Welsh divorce proceedings. It requires a market value of any business interest as at the statement date on a defensible basis. A number pulled from thin air will be challenged by the other side's expert, so the valuation needs to sit on documented methodology and evidence from the start.
What valuation does an IHT400 need?
For IHT400 (inheritance tax) the value required is the open-market value of the business interest at the date of death, prepared on HMRC's statutory basis with minority and marketability discounts where they apply. A broker's headline figure is not appropriate for this filing and is routinely challenged when submitted without documented workings.
Do I need a valuation for probate?
Yes. HMRC requires a market value of any business interest at the date of death for inheritance tax purposes. The valuation needs to be defensible and follow the statutory basis — a broker's number is not appropriate for a probate submission. We produce reports on the correct basis, with the workings in full.
Can the same business have more than one value?
Yes, and this surprises people. The standard of value changes with the purpose (sale, tax, probate, divorce, dispute, share scheme) and with the size of the holding — a minority stake is worth less per share than a controlling one. 'What is it worth?' is always really 'worth to whom, and for what?'
What information do you need to value my business?
Typically the last three years of statutory accounts, the most recent management accounts, a short conversation about owner adjustments, customer concentration and any one-off items, and a sense of the purpose of the valuation. We send a checklist when you get in touch and everything can be shared securely by email or upload link.
Do you cover the whole UK?
Yes. We work with SME owners across England, Scotland, Wales and Northern Ireland from our Bristol base. The work is done remotely from your accounts and management figures, so location never delays the report and there is no site visit to arrange.
What size of business do you value?
We focus on UK SMEs with turnover between roughly £500k and £20m. Outside that range we will tell you honestly and, where helpful, point you towards a better-suited firm rather than overreach. Businesses under £500k rarely need a formal written report; those above £20m sit outside the fixed-fee product.
More detail in our guides on how to value a UK business and how much your business is worth.
Want a real figure for your business?
Independent, written valuations delivered in 72 hours for a fixed fee, typically £495.