How Much Is My Business Worth | Business Valuation Guide

Desk with financial reports, calculator and planning tools used to assess how much a business is worth

If you're thinking about selling your company, the first question on your mind is likely: how much is my business worth

It’s a fair question and one that doesn’t have a one-size-fits-all answer. But by understanding how valuations are calculated and what buyers are really looking for, you’ll be in a much better position to plan your exit properly.

What Determines How Much Is My Business Worth

There are several key factors that influence how your business is valued. These include:

💼 1. Profitability

Buyers are mainly interested in profit, not just revenue. Most valuations are based on your annual profit, usually adjusted for one-off or personal costs.

📈 2. Growth Potential

If your business has strong potential for future growth, buyers may be willing to pay more. This could come from expansion opportunities, new services or untapped markets.

📊 3. Industry Sector

Valuation multiples vary depending on the industry. A tech business will typically be valued differently to a retail, manufacturing or construction company.

👥 4. How Dependent It Is on You

If your business can operate without you, it’s far more valuable. Systems, documented processes and strong staff make the handover easier and less risky.

🧾 5. Quality of Your Financials

Buyers want to see clean, well-organised accounts. The more confident they feel in your financials, the more secure they’ll feel making a strong offer.

What Is a Typical Valuation Based On

Most small to mid-sized business valuations are based on a multiple of profit.

This is commonly known as EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation), and the multiple applied depends on the size, sector and risk profile of the business.

For example:

A business generating £100,000 profit might sell for 2x = £200,000
A business in a high-growth sector or with recurring income might sell for 3 to 4x or more

Can You Just Use an Online Calculator

Online valuation tools are easy to find, but they rarely reflect reality.

They often overlook important factors like buyer demand, competition, your financial history or staff setup. These calculators use broad averages and don’t consider your unique position.

That’s why working with an experienced broker gives you a far more accurate picture of what your business is really worth.