There are a number of ways in which to value a business. At Company Valuation Services, our robust valuation methods are built on years of experience and through tracking real-time transactional data across the UK.
Completing the company valuation calculator is the first step towards obtaining your market valuation. However, there are a number of additional considerations that can positively influence your company’s value. Our experts can guide you through the following:
Future Financial Performance
Many businesses that can demonstrate consistent performance levels are naturally going to be an attractive proposition to potential buyers. It is simply a ‘safer bet’. Because of this, higher values are generally paid by acquirers who can see long-term growth and prosperity.
Strength of Brand
Depending on the industry, the strength of a company’s brand can influence its value. If the brand is perceived positively, this will drive the valuation higher. Additionally, having significant IPR or patents means that an acquirer is investing in a product or service that will benefit them in the long-run. Ultimately, being associated with a strong brand name will help the acquirer break into new markets.
When buyers see a brand with a strong and trusting customer base, they are immediately drawn to the business. This is particularly relevant to trade buyers that might be able to sell cross-existing products or services straight into the target company’s client base. This approach offers companies access to potential customers they might not be able to target without the acquisition.
Experience and skills of management team
A business is held together by its management team. The strength of a company’s management team will not go unnoticed by potential buyers (particularly investment buyers who are looking to get involved). The main point is that investment buyers won’t be necessarily involved in day-to-day operations, so they need a trustworthy and reliable management team to oversee the business.
Supply chain strengths
A business with a strong supply chain provides significant benefits, from manufacturing quality to competitive prices. This may mean that the acquirer can increase margins on their existing products by making use of the target’s supply chain.
Synergies with the buyer
Occasionally, a buyer can economise by making an acquisition. For example, this might include reducing staff overheads, machinery or premises capacity. An acquirer can make significant savings by utilising both operations, increasing profit margins as a result.
Achieving a successful company sale
Owners who are considering the sale of their company must consult a professional business adviser before jumping into a transaction. This is the owner’s prerogative if they are to retain the maximum value from their business. The value of a company can be greatly influenced by developing a persuasive argument for the buyer to pursue an acquisition.