How we value a business.
Five recognised methods, run in parallel and reconciled — because a defensible valuation is a range with visible workings, not a single number handed down without explanation.
Free basic valuation returned within 24 hours. Formal engagements scoped and fixed-fee quoted up front.
Five methods, run in parallel and reconciled.
No single method tells the whole truth about a private company. Each captures something the others miss, so we run several and reconcile them — and where they disagree, that disagreement is itself information that goes in the report.
Why a range, not a number
A business is not worth one figure. Different methods, applied honestly, land at different points — and the spread between them tells you how much confidence the number deserves. A tight cluster is a reliable valuation; a wide one is a warning that the value hinges on assumptions worth interrogating before you transact.
These value the business on the economic benefit it produces for its owners — the cash it can actually generate, rather than the profit its accounts report.
Free cash flow
Values the business on the cash it can generate for its owners over time, discounted back to a present value. It is the workhorse method for private companies, because it measures genuine economic benefit rather than accounting profit — two figures that can differ sharply once non-cash items and working-capital movements are accounted for.
The method turns on two things: a credible projection of future cash flows, and a discount rate that reflects the risk of actually receiving them. Both are stated explicitly in the report, and the sensitivity analysis shows how the value moves as each shifts — because a valuation that hides its assumptions is not a valuation, it is an assertion.
- Best for
- Profitable, stable businesses
- Basis
- Projected cash, discounted
- Sensitivity
- Discount rate, growth
Excess earnings
Separates the return attributable to tangible assets from the profit generated by goodwill and other intangibles — brand, customer relationships, know-how. The tangible assets are valued on the return they would ordinarily earn, and the earnings above that level are capitalised as the intangible value of the business.
It is particularly useful for smaller owner-managed businesses, where a large share of the value sits in intangibles that never appear on the balance sheet. It also makes explicit something owners intuitively feel but cannot always evidence: that the business is worth more than the sum of its equipment and stock.
- Best for
- Owner-managed SMEs
- Basis
- Tangible return + goodwill
- Sensitivity
- Intangible earnings
These benchmark the business against real evidence from the market — what comparable companies are worth, and what buyers have actually paid for businesses like it.
Guideline public company
Benchmarks the business against listed companies using valuation multiples such as price-to-earnings or enterprise-value-to-EBITDA. It suits businesses with financials and market presence broadly comparable to listed peers, and it anchors the valuation in observable market pricing rather than projection alone.
The judgement lies in comparability and in the adjustments that follow. A private SME is smaller, less liquid and more owner-dependent than a listed company, so the raw multiple is discounted to reflect those differences. Those discounts are stated and reasoned, not applied silently.
- Best for
- Businesses with listed peers
- Basis
- Listed-company multiples
- Sensitivity
- Comparability, discounts
Guideline transaction
Draws on actual completed sales of comparable businesses. Where the guideline public company method asks what the market prices a similar business at, this asks what buyers have genuinely paid for one — a different and often more persuasive question, because it reflects real transactions rather than theoretical pricing.
Its reliability depends on the quality and recency of the comparable deals, and on how much is known about their terms. A sale price distorted by an earn-out, a distressed seller or a strategic premium has to be understood before it can be relied on. We use it where good comparables exist and weight it accordingly where they are thin.
- Best for
- Active deal sectors
- Basis
- Comparable completed sales
- Sensitivity
- Deal recency, terms
Prior transaction
Uses the company's own transaction history — a previous equity raise, a buyout, or the sale of a shareholding — as direct evidence of value, provided those events were recent and conducted at arm's length. Nothing benchmarks a business better than what someone actually paid for a piece of it.
The caveats are recency and independence. A raise from three years ago, or a transfer between related parties, tells you little about value today. Where a clean, recent prior transaction exists it is powerful evidence; where it does not, the method simply carries less weight in the reconciliation.
- Best for
- Recent equity events
- Basis
- The company's own history
- Sensitivity
- Recency, arm's length
And an asset and liability review underneath all of it.
Every mandate includes a review of tangible and intangible assets, liabilities and off-balance-sheet commitments — both as a valuation floor and as a check on the income and market methods above.
The value below which it makes no sense
A profitable business should be worth more than its net assets. Where an income-based figure falls below asset value, that gap is a finding worth understanding, not a rounding error.
What the balance sheet leaves out
Leases, guarantees, restraint undertakings and related-party arrangements rarely appear in the accounts and frequently move the number. They are investigated directly.
The check on everything else
Asset value provides an independent reference point against which the income and market results are sanity-checked. When all three approaches converge, confidence is high.
Questions we're asked most.
Why use five methods instead of one?
Because no single method captures the whole truth about a private company. Income-based methods measure economic benefit, market-based methods anchor in real pricing, and the asset review provides a floor. Running them together and reconciling the results produces a defensible range and, crucially, a measure of how much confidence that range deserves.
What if the methods disagree?
Disagreement is information. A tight cluster of results is a reliable valuation; a wide spread signals that the value depends heavily on assumptions worth interrogating before you transact. Either way, the divergence and its causes are set out in the report rather than averaged away.
Which method carries the most weight?
It depends on the business. Free cash flow usually leads for profitable, stable companies; excess earnings for intangible-heavy owner-managed businesses; market methods where good comparables exist. The weighting is a matter of judgement, and the report explains how the final range was reconciled.
Do you follow recognised valuation standards?
The methods applied are the income, market and asset-based approaches recognised in professional valuation practice internationally. Each engagement is scoped against its purpose, because a valuation for a negotiation, for SARS and for a court are held to different standards of evidence.
Can I see the workings?
Yes. Every method applied, every material assumption, and the sensitivity of the result to those assumptions is set out in the report. A valuation you cannot interrogate is of little use in a negotiation, so ours are written to be followed by the owner, not only by an accountant.
An indicative range, back within 24 hours.
Give us your sector, last year's turnover and your rough operating profit. We'll come back with a range and the assumptions we used to get there.
- A range, not a single number — with the workings
- Read by a person before it reaches you
- No obligation and no third-party sharing