At Business Partnership we’ve entered the final stages of a 12-month rebranding project. It has been a huge endeavour with input from all our Partners, and includes implementation of a new CRM system that integrates with our website. The upgrade will improve the quality of data gathering and analytics to give us more information and create efficiencies to help us better serve our clients. We also realise updating our brand will add value in other ways.
The reason we embarked on the project was our brand was in need of a refresh. When business branding appears dated, it can come across to an outsider as being lax and stuck in its ways, while a fresh new look can enhance people’s perceptions, moving it from irrelevant to current. From a business broker perspective, we know for a fact that updating your branding can add significant value to the sale price of a business.
Building a trustworthy, reputable brand could be invaluable should you decide to sell your business. In this post we explain how branding contributes to business value, how much a strong brand could be worth in financial terms, and share some key points to consider when tackling a rebranding project, based on our own experiences.
Positive brand perception is a valuable business asset. Creating an emotional and personal connection with your brand inspires trust, loyalty and repeat purchasing decisions. A consistent brand experience throughout every stage of the customer journey is something every business should strive to achieve. Here’s why…
A strong business brand:
When valuing a business, your brand counts as an intangible business asset, similar to things like trademarks, intellectual property, and strength of client/supplier relationships. According to Forbes, brand contributes between 5% and 13% of overall market value, and if you have a strong brand this equates to anywhere from 9-28% higher revenue growth. Above all, your brand reflects your reputation and the quality of connection with your customers. A robust, up-to-date brand can be highly attractive to potential buyers.
When you look at the value of global brands such as Nike, Coca-Cola and Apple, it’s quite easy to understand the value a strong brand adds to a business. Take Apple for instance, millions of people across the world trust the Apple brand to keep them connected. Many choose Apple devices for their quality, reliability and durability. The company’s vast technical knowledge and investment into research and development are also held in high esteem. For these reasons people don’t think twice about sharing their most personal data with the company.
The inherent strength of the Apple brand has created one of the world’s most loyal customer followings. Fans are willing to pay over the odds to own the latest version of phone, watch or computer with its technical wizardry and wonder.
Brand reputation is more than updating a logo, it is built over time. This is why switched-on business owners look to invest in brand development long before they decide to sell. Our advice is to take a long-term view and weigh up the potential returns on investment. What are the costs and benefits of refreshing your brand now versus leaving the job for a new business owner? For more advice on this subject, talk to your local business broker. You may also find these tips for selling a business in 2025 helpful.
Rebranding is no quick fix. You can’t push a button to make everything change (believe us, we know!). While it’s drummed into us to have a consistent brand and messaging across all our marketing, individual channels are rarely connected. For example, your website is a separate entity to social media platforms, and every item requires a different file type, format, or size of logo. Here are some other helpful points to consider:
By investing in your brand you are taking positive steps to grow your customer base, increase revenue, and create a loyal following that could become a valuable business asset. Whether to invest prior to selling is a conundrum best talked through with a business broker. With expert industry knowledge and free valuations, you can trust us to put the interests of you and your business first. Find your local Business Partnership broker here.
As we enter a new tax year, financial uncertainty is a hot topic of discussion between our business brokers and their clients. The question we’re being asked most is ‘What impact will the UK National Living Wage and Employer’s National Insurance increases have on the sale value of my business?’.
The uncertainty created by economic and political factors is a genuine and valid concern for owners selling their business. External influences can affect market conditions and reduce buyer confidence. Look at what’s happened to share prices in the aftermath of the Trump Tariff announcement. The global markets are reeling. The result of uncertainty in financial markets is a more cautious and demanding buyer.
In this blog we share the steps to take to plan for the impact of financial change and uncertainty on your business sale, how to calculate the potential impact and present this information to maintain buyer confidence.
Every business experiences expected and unexpected challenges in its lifetime. Losing your biggest customer or a major new competitor in the market would be unexpected. The planned increase in National Living Wage or tax is not. The latter is a significant change for businesses which employ staff. However, you can forecast and plan for some financial changes to prevent them devaluing your business.
Of course, external factors can influence business value positively and negatively. Valuations are made at a specific point in time. No business valuation is set in stone and most are open to negotiation. So while we are focusing on the consequences of rising costs in this post, financial uncertainty can have positive impacts too.
A business broker will do their utmost to foresee challenges and guide you to prepare for the sale process, but not every challenge can be anticipated. Staying on top of your numbers and keeping your financial forecasts up to date will help you to navigate change. Thorough, accurate and detailed forecasting is essential.
For a current market business valuation, contact your local business broker.
Since the changes were announced in November 2024, we’ve been advising vendors to recalculate their financial forecasts based on the new National Living Wage and Employer’s National Insurance rates effective from April 2025.
Buyers are asking for an outline of how a business will cover these rising costs. Will you pass the increase on to customers, plan to curb recruitment, make redundancies, or can you cover it from profits?
Accurate and detailed financial forecasting is crucial when selling a business as a buyer wants to know the business they are investing in is on a sound footing – now and in the future. Building an honest picture of where your business will stand financially at the end of this year, next year, and beyond builds buyer confidence. It shows you are on top of your numbers and have considered different external scenarios and their possible impacts.
Buyers will analyse your forecasting to understand the risks the business will face and for future growth, business planning, budgeting and recruitment. They need those figures to make a considered valuation, and if they decide it’s a good investment decision, anticipate any tough choices that lie ahead.
Vendors should consider these four themes when preparing and presenting financial forecasts to prospective buyers.
The way you present your business for sale is important. Every business vendor must make sure their financial forecasts are fit for purpose. You cannot prepare the forecasts prior to listing your business on the market and then forget about them. As economic conditions change, you should be reviewing and refreshing your financial forecasts to show potential buyers exactly how you stack up against the competition. It’s part of risk management and protecting your business during the sales process. In fact, the future of your business, and your own future plans, depend on it.
If financial forecasting and modelling is not your strong suit, your local Business Partnership broker can advise on the kind of financial documentation a buyer will expect to see. Find your local expert here. We help our clients handle every aspect of their sale or purchase, from valuation and finding your ideal buyer to supporting the sales process through to completion.
When you’re planning to exit, merge, grow or make future plans for your business, understanding what it’s worth is likely going to be your primary concern.
When it comes to valuing a business correctly there’s no simple formula that will give you a definitive value, as many factors are in play. In this article we are going to explore the most common approaches to valuing a business, what can impact the number, and how you can use this insight to plan your next move.
Valuing a business requires proper consideration of not just past performance but also current conditions and likely future potential. Of course, potential risks that could be on the horizon play a part too. Valuing a business accurately therefore requires a holistic approach and using rule of thumb and average industry values will often provide a mis-leading answer.
Creating an accurate valuation allows you to make informed strategic decisions regarding expansion and diversification or if you’re looking to secure the sale of the company.
Exiting a business is a process. There are various steps to go through if you’re going to achieve maximum. Understanding your current valuation compared with where you want it to be is the start of the process. It will help you understand what changes you need to make before you sell in order to get the best price and the level of interest that you will need.
Investors will want to scrutinise your valuation assumptions to assess their potential return on investment.
There are two main income based methods used:
This approach heavily focuses on cash flow and how well equipped the company is to generate it for new investors in the future.
This approach takes a look at the corporate landscape and looks to compare the company against similar organisations based on revenue, profits, or assets.
Average market multiples come into play here. This allows potential investors to compare companies on a like-for-like basis. This could include looking at earnings, book value, or simply headline sales figures. The risk is that unless your business is average you may under estimate its value.
Here, the value is derived from the company’s assets and liabilities. This includes the book value of assets or the liquidation value, considering what the company owns versus what it owes.
If the company owns a lot of high value machinery or property this can be a popular avenue when it comes to valuing the business as that represents almost guaranteed value, unlike future sales forecasts.
Revenue trends, profit margins, cash flow, and stability over time significantly impact valuation. Consistent growth and recurring revenue are valued by investors and therefore can result in a higher valuation.
No matter what you’ve achieved in the past or how solid the situation looks on paper, the market is the market and it can either help you or prove to be a huge hindrance.
Economic, social and political factors all have a constant impact on your outlook. An investor will likely want to know how these pressures could impact the future of the business and how changes in the level of volatility could affect operations.
What do you own?
Unique assets, patents, intellectual property? Some other kind of competitive advantage?
Of course, this can play a massive part in your business valuation, even if you have low revenues. Potential can be pivotal if it’s protected.
Which brings us on to risk.
Assessing risks associated with industry-specific challenges, market competition, regulatory changes, and management stability can impact your company’s valuation.
Investors and buyers of businesses like stability matched with potential.
Business valuation is a nuanced process, there is no one size fits all.
To understand exactly where you are, you need to talk to an expert who can assess your situation from all angles.
This is especially important if you’re looking to sell as they will be able to help you maximise the value of your business whilst working to a timeline that suits your needs.
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation, it is always confidential, simply find out what we could achieve for you. Call our team on 0207 145 0040 or find your local contact here.
Selling a business can be a big step in someone’s life and one that needs careful consideration. The prospect of valuing your business can be daunting, especially if it is not making a profit, but there are plenty of resources to help you. So, here is some advice from national business broker, Business Partnership, on how to avoid valuation traps and find the value of your business, no matter your situation.
When valuing a business for the open sale market a multiple of net profit is often the most important guide. That multiple can very much depend upon the strength of the brand. The other matter business owners have to consider is how much of that sale price ends up in your pocket as the owner. A business sale will also incur other fees to any professionals you use – broker, solicitor, accountant etc – and maybe costs for a refurbishment to bring a retail site up to latest brand standards. All these costs should be detailed.
When it comes to valuing your business, the first thing to consider is whether the business is performing well or not. Determine the true net profit of your business by bringing your accounts up to date. Then get both annual accounts and year to date management accounts to show a buyer what the profit is. It is hard to sell a business without these figures. “Trust me we are making money” will not work for most buyers and certainly not their funders.
A broker would then apply a multiple to this profit. The multiple depends on several factors, including the brand strength, stability of the business’s cash flow and the forecasted business growth. A profitable business is usually valued at between one and five times the net profit. An existing and already profitable business has that income, so remind your potential buyers. Remember, business resale valuations are never exact, and you may have different expectations for the business, so the next step in the process is negotiation.
Unfortunately, not all businesses succeed so how do you value one that is failing? A good place to start is to find out the total cost of similar businesses in your sector and any required investment in equipment or refurbishment of the building. This is an entry point for anyone interested in your business. And if you have a retail business, the good news is your unit may be more valuable than you realise, for example good contracts and well-maintained equipment or other similar assets can help the price of a business.
If, however, your business is growing and the turnover is increasing but currently unprofitable, you will need to provide some forecasts to show that the future is looking better. Research your industry and finding out what other struggling businesses have sold for. Speak to a professional insolvency practitioner who can advise on this.
Whether it is because someone is planning to take a step back, or ready to let go and try something new, almost every business owner reaches the stage where they want to sell their company. It is crucial to carefully design your business sale that you do not set unintended valuation “traps”, which could hinder the effectiveness and increase the costs of your transition.
When you have spent years of hard work and finances building your business, it is often difficult not to see it through rose-tinted glasses. However, look at it from a buyer’s perspective. Forget that you know everything. Assume your buyer knows nothing. Ask yourself, if you were buying the business, would you be offering a top price or discounting it?
Another pitfall in the sales process is thinking your business is more valuable than it really is because it has a high turnover. Unfortunately, this is not the case. A business’s value comes from profits, not turnover. So, when setting an asking price, make sure you factor this in; otherwise, the likelihood of selling your business is massively reduced.
Try not to be overhasty when accepting a higher-than-expected valuation. If a great valuation is provided by a broker, question how it was arrived at. If you are offered a price which seems too good to be true, it often can be unachievable.
When it comes to having your business valued, you often have the chance to get either a free valuation or a paid-for valuation. Both have their place in the business world, but a paid valuation will go into much more detail, which is far more beneficial when it comes to something important, like selling your business.
Finding the value of your business is an intimidating process if you do not know what you are doing. So, consult an independent business broker for advice when it comes to selling your business. It is also worth discussing the resale with an accountant or lawyer with experience in the franchise industry. They will be impartial and able to offer support during the negotiation discussions.
By following these steps, you will be able to find the value of your business, no matter your situation. For more advice on buying or selling a business, please get in touch with your local Regional Partner.
When the time comes to sell a business, most owners would probably say that it’s their goal to sell or transfer their business in order to fund their retirement or finance the next stage of their career.
Determining the market value of a business is one of the hardest to put a price on, so owners should take the time to understand what their business is really worth and put themselves in the buyer’s shoes to find out what they want.
Selling a business will probably be the largest financial transaction many owners will carry out so it’s even more important that they get the best price for it. Sometimes, all you need to do to see your business rise in value is to wait for the right market to sell it in, but there are many more proactive ways to increase the value of your business prior to putting it on the market.
Understanding your company’s value becomes increasingly important and it depends on a variety of factors, such as past profitability and asset value. In financial terms, the value of any business is the current worth of its future cash flows for the prospective buyer. There are also intangible factors to consider, and often provide the most value, such as customer goodwill and intellectual property.
You only have one opportunity to sell your company so it’s vital that you make your business as appealing as possible to buyers and they feel they can receive a return on their investment. Here are some factors that will help increase the value of your business:
Before talking to potential buyers, you will need to be clear on the contracts you have in place, whether its the lease on the building, customer or supplier contracts. It might also be worth renewing any key contracts as this might make the business more valuable and check that customer contracts allow for change of ownership – otherwise they may need to be rewritten or a clause added to ensure they’ll carry on after you sell. Securing loyal customers will have a big impact on the company’s value.
Having reliable suppliers will ensure continuity for the business, so it is equally important to make sure their contracts are up to date and maybe consider diversifying your supply chains. Having more options can make the business better at coping with the unexpected, which will enhance its value in the eyes of potential buyers.
A company’s competitive advantage is the reason customers buy from them instead of their competitors. It is vital that businesses know their competitive advantage and then they protect and promote it. High quality, innovative products or services, coupled with exceptional customer service can help differentiate a business from its competition.
Every business should have a unique selling point, also known as USP, and this is extremely important to portray in all marketing efforts, whether that includes customer testimonials on the website, creating short videos for social media channels or doing PR and blogs to raise awareness. Speaking to your current client base would also provide interesting insight as to why they chose your business over another and then this information can be used to attract new customers. Remember, the more revenue a business makes, the more a business is worth.
Having a skilled and experienced team may be the factor that makes a business the most valuable and be more attractive to a wider range of buyers, especially those with less experience in the sector. By retaining these employees, it will make the transition much easier and the business will continue to generate profits from day one. It can also help your employees to accept and benefit from the sale.
A company that unfailingly generates higher profits and cash inflows will influence buyers as they will like a business that can be lucrative in any type of environment. For example, if a company grew both sales and profits during the Covid pandemic, while other firms in the same industry struggled, it will be more valuable than the competition and more appealing to buyers.
Businesses with established recurring revenue streams are more appealing to buyers, and in some cases, significantly increase the value and sale price of the business. Buyers can be confident with recurring revenues that there will be guaranteed cash flow for the business and more stability when it comes to forecasting revenues and creating budgets. There will also be reduced risk and more opportunities for growth, particularly if the buyer believes they can grow recurring revenue in the future.
Building the value of a business before a sale will be hugely beneficial and it can pay off in the form of a higher sale price. It may simply include making changes, or simply uncovering existing value that you can promote to buyers. By increasing the value of your business before you sell will ensure you have increasing revenue and profits, as well as a strong management team, quality products and services and strong processes and procedures.
For advice on buying or selling a business, please get in touch with your closest Regional Partner.
If you’re thinking about selling your business in the near future then you will want to make sure you get the best price for it. Sometimes, all you need to do to see your business rise in value is to wait for the right market to sell it in. However, there are many more pro-active ways to increase the value of your business before you sell.
One way that your business can increase in value is if the market grows stronger and its price rises. The value of your business can go up if there is more demand for businesses in your sector or if the economy as a whole gets stronger. It can sometimes be a good idea to wait to sell if you’re expecting the value of your business to increase. You might only need to wait a few months till a seasonal business is at its peak, but sometimes it’s worth taking a longer term approach. Waiting can be a particularly good move if your sector is recovering from temporary issues such as the COVID-19 lockdowns as the price is expected to go up.
However, it’s important to remember that no one can guarantee when the market will improve. The value of your business could go down if the economy suffers an unexpected shock or downturn. Any business owner who has been through the COVID-19 pandemic will be well aware of these risks and how unpredictable the market can be. Even if the market rises, this might not benefit you if you’re planning to invest your money in another business, as it will also become more expensive to buy. Instead of relying on the market to raise the value of your business, it can be better to take a pro-active approach and do what you can to make your business more attractive to buyers.
The best ways to make your business more attractive to buyers will be to improve its finances, make the future revenue more predictable, and ensure that the business can run without you.
Knowing how much your business is worth now could help you make the right decision about when to sell. You can ask one of our experienced brokers to value your business. We will take a close look at the business and use our understanding of the local market to give you a better idea of what it is worth. Our brokers can also advise you on the best time to sell and what you can do to increase the value of your business before you put it on the market.
Contact us to find out more about business valuations and more specific advice about selling your business.
When you look ahead over the next 12 months, where will your growth come from? Will you find new customers or sell more to your existing customers?
The answer can have a great impact on the value of your business.
Take a look at the research coming from a recent analysis of owners who completed their Value Builder Score questionnaire. We found that the average company that had received an offer from an acquirer was at 3.5 times their pre-tax profit. When we isolated just the businesses that had a historical growth rate of 20 percent or greater, the multiple offered improved to 4.3 times pre-tax profit, or about 20 percent more than their slower growth counterparts.
However, the real bump in multiple came when we isolated just those companies that claim to have a unique product or service for which they have a virtual monopoly. The niche companies enjoyed average offers of 5.4 times pre-tax profit, or roughly 50 percent more than the average companies, and fully 20 percent more than the fastest growth companies.
Growth companies often chase “bad” turnover. What we mean by this is that they are chasing increased sales by selling a wider variety of products to an expanding customer base. Growth is often more easily achieved by selling more things to your existing customers, so you just keep adding complimentary product and service lines, “good” turnover. So if you can specialise exactly in satisfying your customer base, with a smaller but more targeted product range, it is to your advantage.
Furthermore large acquirers will place less value on sales derived from products and services that they already sell. They will take the view that their economies of scale mean that they are in a better position to sell the things that both of you offer.
Perhaps more importantly, they will pay more to get access to a new product or service, which they can sell to their customers. Big, mature companies have customers and systems, but they sometimes lack innovation and acquisition is often their best route to new products and services. We see it all the time in companies like Apple, who bought AuthenTec, the company who provides their fingerprint technology.
So a clear focus on your niche is one of many areas where short-term profit and the long-term value of your business are at odds, e.g. if you wanted to maximize your short-term profit, you might avoid investing in new technology or hiring a head of sales, arguing that both investments would hinder short-term profit. The truly valuable company finds a way to deliver profit in the short term, while simultaneously focusing their strategy on what drives up the value of the business.
You can get your own Value Builder Score on our Business Partnership Corporate website, and see how you compare on the eight key drivers of business.
This post was originally created on 25 September 2014 and subsequently updated.
All business owners aim to add value to their business, but it can be difficult knowing where to start, particularly if you are a small to medium-sized business and feel that you are starting to plateau. However, there are in fact many simple but effective methods to adding value that allow you to increase productivity and profitability.
The first step is to increase the speed at which you deliver your services and products. In 2018, speed of service is everything and people will see value in a business that can deliver faster than their competitors.
The next step is to improve the quality of your service and products and ensure that it is of a better standard than you competitors. The idea of quality can vary but ultimately it is for the customer to decide. For many consumers quality equates to speed of service which is something you will need to be aware of when considering how long your services take.
Another area of your business you will want to look into to add value is how convenient your products and services are for your customers. A perfect example of this is UberEats as people know that within 20-30 minutes they can have the food of their choosing delivered to their door instead of having to get up and travel there and back for groceries.
Finally, one of the simplest ways to add value is to add value to your products and services. If all of your competitors are offering the same product for the same price there is nothing to distinguish your business in the market. In order to stand out you will want to have an addition to what you offer whether it be improved packaging, simplifying your service or product, add an extra service or product or promotional discount.
Once implemented, each of these strategies, although seemingly simplistic will gradually begin to increase profitability, productivity, ultimately adding value to your business.
Intellectual Property (IP) and other ethereal assets, such as patents and licenses, can add value to your business, just as tangible assets such as machinery do – if not more so.
For one thing, IP doesn’t take up room like a machine does! And IP can result in a higher multiple when you come to sell because it generates a revenue stream, even when you’re asleep, on holiday or, heaven forfend, when you finally shuffle off this mortal coil.
I once sold one of my own businesses which was 100% based around an Intellectual Property. When we sold it, the revenues were £100k per annum with an overhead of £200k and a balance sheet of minus £500k.
On the face of it, this business was worthless but it sold for £1.2 million just 4 years after its inception.
And that was purely because the IP we had created was likely to generate revenues of c£15 million to the buyer over the next 3 years. How? Because we had laid the foundations of an IP that they were very well placed to exploit through their existing channels and infrastructure.
And, because they no longer had to pay us royalties to use the property, they stood to save £1.5 million over the same period, thereby making the deal self-financing. That was 10 years ago and the buyer is still exploiting the brand today.
So, if you can create Intellectual Property and licence it, you will create recurring revenue and buyers love recurring revenue. This could be designs, patterns and images but it could equally be software or games; patents and innovative ideas or products.
When ex-Lotus engineer Ron Hickman invented the ‘Workmate’, he saved himself a lot of heartache (and probably a small fortune) by not setting up a factory to make the products and trying to get distribution deals himself. Instead, he agreed a licence deal with Black & Decker who already had production facilities and sales channels, and they paid him royalties for life (and probably beyond). Pretty much all he had to do then was sit back and watch the royalty cheques arrive every 3 months.
Other producers combine production of their own core products with licensing of their image or brand. Emma Bridgwater being one example, where her company manufactures the core products but most other products you see for sale in retail (e.g. tinware, gift wrap, textiles, etc) are licensed to 3rd party manufacturers because, when your manufacturing plant is geared around producing a specific product, such as ceramics, it probably doesn’t make sense to start producing tinware and textiles, as well. You get the reward without the risk.
So, does your business have the potential to leverage intangible assets?
Owner managed businesses are often innovative, creative places, thriving by responding to change and opportunity. Growing the business is a natural ambition which will require investment in assets & staff.
Spending time budgeting and planning the next move are essential practices, in my experience, an exercise most business owners undertake diligently.
Once implemented, the performance and return on the investment is important to measure. Too many owner-managers research and invest in new opportunities yet fail to measure the ongoing impact on the business.
It is important, even vital to producing regular management information, enabling the owner & management team to monitor performance, making changes as necessary. Relying on statutory annual accounts, a sales figure or even the amount of money in the bank is not enough information.
Producing monthly or at least quarterly management accounts, together with some key performance indicators, relevant to your business are essential tools to properly manage, understand & achieve the best results on the investment (and additional cost) you have committed to.
Sales may very well increase but at what cost? Has the gross margin improved? Has the net margin improved? Have you achieved the sales & return as predicted in your budgeting? Is the new investment working to capacity?
In can be very tempting to continue to invest as a follow up to the original investment, at this point you really are fumbling in the dark without good financial information.
For any growing business, the most important investment is the one that’s sometimes overlooked because its often seen as an unnecessary cost: A good accounting system, bookkeeper (employee or outsourced) and a commitment to produce regular, consistent financial information, for the owner and management to use enabling better decisions to be made based on factual, performance-based information.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.