Define what you are selling.
A sale of company shares and a sale of business assets can involve different interests and obligations. Identify the company, any subsidiaries, the ownership interest and what is included. Set the valuation date and intended use before choosing a method.
Understand the earnings a buyer would inherit.
Historical accounts are the starting point, not the entire assessment. Owner remuneration, connected-party rent, exceptional costs and non-recurring income may need examination. An adjustment needs evidence and should reflect the costs needed to operate the business after a sale.
Illustration: an owner’s salary adjustment.
Suppose reported EBITDA is £180,000 and includes £90,000 of owner remuneration. If replacing the owner’s work would cost £65,000, adding back the entire £90,000 would ignore an ongoing expense. On those assumptions, the illustrative adjustment is £25,000, producing £205,000 before any other adjustments. This is a hypothetical explanation, not a recommended treatment for your company.
Choose an approach the evidence can support.
Maintainable earnings, cash-flow analysis and asset-based approaches consider different evidence. Growth, customer dependency, investment requirements and the quality of forecasts affect which approach is useful. A headline sector multiple should not be treated as a company-specific conclusion.
Agree the deliverable.
The proposal can set out the intended valuation analysis, reporting format, assumptions and limitations. Establish who may use or rely on it. A planning assessment for an owner is not automatically suitable for a buyer, lender, court or tax submission.