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Frequently Asked Questions Common questions about our business valuation process How accurate is this business valuation calculator? Our calculator provides industry-standard valuations based on real UK market data and EBITDA multiples across 15+ sectors. The valuation gives you a reliable estimate based on your actual EBITDA and industry sector. However, this is an automated tool - for a formal valuation (such as for legal purposes or investor presentations), we recommend engaging a chartered accountant or professional business valuer who can conduct due diligence and consider qualitative factors. What is EBITDA and how do I calculate it? EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It represents your business's operating profitability. To calculate: Start with your net profit, then add back interest payments, tax expenses, depreciation, and amortization. For example, if your net profit is £80,000, interest is £5,000, tax is £15,000, and depreciation is £10,000, your EBITDA would be £110,000. This metric is widely used in business valuations because it shows earning power independent of financing and accounting decisions. Why do valuations vary by industry sector? Different sectors command different valuation multiples based on risk, growth potential, capital requirements, and market conditions. For example, SaaS and technology businesses often have higher multiples (5-8x EBITDA) due to recurring revenue and scalability, while traditional retail or hospitality businesses may have lower multiples (2-4x EBITDA) due to higher operational risk and lower margins. Our calculator uses current UK market data for each specific sector to provide realistic valuations. What's the difference between revenue multiples and EBITDA multiples? Revenue multiples value your business as a multiple of annual turnover (e.g., 0.5-2x revenue), while EBITDA multiples use your profitability (e.g., 3-6x EBITDA). EBITDA multiples are generally more accurate because they account for profitability, not just sales volume. A company with £1M revenue but £200K EBITDA is worth more than one with £1M revenue and £50K EBITDA. Our calculator primarily uses EBITDA multiples for accuracy. How long does it take to sell a business after getting a valuation? The timeline varies significantly based on business size, complexity, and market conditions. For UK SMEs (£1M-£10M revenue), the typical sale process takes 6-12 months from initial valuation to completion. This includes marketing (1-3 months), negotiations (1-2 months), due diligence (2-3 months), and legal completion (1-2 months). Smaller businesses under £500K revenue can sometimes sell faster (3-6 months), while larger or more complex businesses may take 12-18 months. Having accurate financials and being well-prepared can significantly reduce this timeline. Do I need an accountant to value my business? For an initial understanding of your business value, our free calculator provides a reliable starting point without needing an accountant. However, if you're seriously considering selling, we recommend having your accountant verify your EBITDA calculation and review your financials. For formal valuations required in legal disputes, divorce proceedings, or investor pitches, you'll need a chartered accountant or certified business valuer to conduct a full assessment. Our calculator is perfect for early-stage exploration and informal discussions. What factors affect my company valuation beyond EBITDA? While EBITDA is the foundation, many qualitative factors impact valuation: customer concentration (diversified is better), recurring revenue (highly valued), management team strength, growth trajectory, competitive advantages, asset quality, and market position. A business with 80% revenue from one customer might be valued at a lower multiple than one with 200 diverse customers. Similarly, businesses with long-term contracts, proprietary technology, or strong brand recognition command premium valuations. Our calculator focuses on the quantitative baseline, but a professional buyer will consider these qualitative factors in their final assessment. Is this valuation suitable for discussions with buyers? Yes, the detailed PDF report from our calculator provides a professional starting point for discussions with potential buyers, brokers, or advisors. It shows you've done your homework and understand your business's market value. However, keep in mind that buyers will conduct their own due diligence and may adjust the valuation based on their specific criteria, synergies, or concerns. Use our valuation to set realistic expectations and as a negotiation baseline, but remain flexible. The actual sale price is ultimately determined by what a buyer is willing to pay and what you're willing to accept. Why is this business valuation calculator completely free? We're active UK business buyers looking to acquire quality SMEs. By providing this free calculator, we help business owners understand their company's value while identifying potential acquisition opportunities that match our investment criteria. There are no hidden fees, no obligations, and you own your data. If your business aligns with what we're looking for, we may reach out to discuss a potential acquisition - but there's absolutely no pressure. We believe in transparency and building relationships based on mutual benefit. Is my business information kept confidential? Absolutely. All information you provide through our calculator is stored securely and treated with strict confidentiality. We never share, sell, or disclose your business details to third parties without your explicit consent. Your data is encrypted, GDPR-compliant, and only accessible to our core acquisition team. If we believe there's a potential fit for acquisition, we'll contact you directly and professionally - but your information will never be shared with competitors, brokers, or other parties. You're in complete control of how your information is used.