Why Relying on Theoretical Valuations Won’t Cut It
How much is your business worth? Probably less than you think.
While there are countless valuation methods available, the truth is, your business is only worth what a buyer or investor is willing to pay — not a penny more.
Many owners make the mistake of relying on a specific valuation they’ve calculated, which may or may not be realistic. Merely coming up with a number based on a formula, such as EBITDA multiples, doesn’t guarantee willing buyers on the other side of the transaction.
Selling a business is not like selling a house; you can’t just put up a “For Sale” sign and expect serious buyers to line up. Additionally, comparing your business to others that sold for astronomical multiples can be misleading, as each situation is highly nuanced.
Depending solely on generic valuation methods is naive. To maximise your exit strategy, you need to be strategic long before your planned exit date. Focus on what truly impacts valuation and improves the number and quality of potential buyers.
Consider collaborating with strategic partners who can guide you on the right path, increase your business’s value, and accelerate your journey toward a successful exit with the highest possible valuation.
Leaving the fate of your exit to chance is risky. Invest time and effort into understanding the factors that influence your business’s value to ensure a successful exit.
#SME #UKBusiness #M&A #ExitStrategy
