M & A Rainmaker

Valuing your Business

It is equally possible to undervalue or overvalue your business. On the one hand you have obviously put a lot of blood, sweat and tears into creating and building your business and therefore you may have a tendency to be over optimistic and  overvalue it. On the other hand you may not have the skills and experience of an M & A accountant and therefore you may undervalue it.

Getting a valuation from an “ordinary accountant” is often completely different to getting one from an M & A accountant.

Even M & A accountants will come to different valuations.

Ordinary and M & A accountants may well not understand your market and your business as well as you do so they may both undervalue the business.

I have often received massive under valuations for businesses from accountants.  Partly these can be avoided by dealing with M & A advisers who are specialist to your market sector and perhaps to your size of company.

There are technical ways of valuing a business of which more details can be found at the links below.

You can research the valuations ( in various ways ) of similar companies to yours that have been sold. Sometimes this means piecing together sale price news and information with accounts information.

One of the best ways of getting a value of your business is by having a “ Beauty Parade “ of M & A advisers. We talk more about this later in the section – Finding the right M & A adviser. M & A advisers, particularly those specialist in your sector, will have a good grasp of current business values because they will be advising buyers, sellers and fundraisers in your market all the time.