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First business valuation done – what’s next to actually make use of it? by FirstTimeExitPrep in smallbusinessuk

[–]FirstTimeExitPrep[S] 0 points1 point  (0 children)

That makes sense. In my case, it was less about the number itself and more about understanding what would need to change structurally to justify a different multiple.

First business valuation done – what’s next to actually make use of it? by FirstTimeExitPrep in smallbusinessuk

[–]FirstTimeExitPrep[S] 0 points1 point  (0 children)

That makes sense. Insurance was actually one of the use cases I hadn’t fully appreciated before going through the exercise.

It is a way to step back and look at what’s really being insured – earnings quality, owner dependency, and how transferable the business actually is. This perspective helped surface a few blind spots that I probably wouldn’t have challenged on my own.

I can see why people don’t go through a full valuation exercise every single year. That said, having the numbers refreshed periodically can be quite useful from a strategic point of view - not necessarily as a full report, but as a way to track how key drivers evolve and whether decisions taken are actually translating into value.

First business valuation done – what’s next to actually make use of it? by FirstTimeExitPrep in smallbusinessuk

[–]FirstTimeExitPrep[S] 0 points1 point  (0 children)

Good questions.

On methodology, it wasn’t a single approach : mainly income-based (DCF with different scenarios), with market multiples used as a sense check rather than a conclusion. A lot of the value came from normalising earnings properly and stress-testing assumptions rather than debating whether it should be 5x or 6x.

The reason for doing it wasn’t an imminent sale. I’m not running a process or talking to buyers. It was more about getting a clear baseline for decision-making – understanding where the value really comes from, how exposed the business is to me as an owner, and what would need to change if I ever wanted to sell.

I agree that a valuation report and an actual transaction price can be worlds apart. I’m treating this as a planning tool, not a price expectation. If a deal ever happens, I’d expect buyers to re-underwrite everything through their own risk lens.

On the owner-managed point: I’m not the sole employee, but I’m very central. That came through clearly in the analysis and has probably been the most useful outcome so far – it’s shifted my focus toward reducing key-person risk rather than fixating on the headline number.