The main approaches to valuing a business, what drives value, and when to seek an independent view.
Why valuation matters
Whether you are raising capital, planning a sale, resolving a dispute or simply tracking progress, a defensible valuation gives every party a common starting point. Without one, negotiations drift and decisions rest on instinct.
The main approaches
Three families of method dominate. Asset-based valuation looks at what the business owns net of what it owes. Market-based valuation compares the business to similar companies or transactions. Income-based valuation, including discounted cash flow, values the business on the cash it is expected to generate. In practice, more than one is used and the results triangulated.
What drives value
Beyond the numbers, value is shaped by growth prospects, the durability of earnings, customer concentration, the strength of the management team and how transferable the business is. Improving these well before a transaction often moves the number more than any negotiation.
When to get an independent valuation
For transactions, disputes, tax planning and major decisions, an independent valuation carries weight that an internal estimate does not. Our corporate financing team prepares valuations built to withstand scrutiny.
Book a consultation and we will turn the principles here into a plan for your goals.
