What actually drives the value of your business

Most owners assume value is a simple multiple of profit. Profit matters, but two businesses earning the same amount can be worth very different sums. The difference comes down to how reliable and transferable those earnings are.

Maintainable earnings, not last year's profit

A valuer doesn't value last year's accounting profit. They work out maintainable earnings — what the business can reasonably be expected to keep earning under a new owner. That means normalising for:

• an owner's pay that is above or below a market wage
• genuine one-off costs that won't recur
• personal expenses run through the business

Surfacing these legitimately — with evidence — is one of the few levers that improves the figure without changing the business.

The multiple is really a measure of risk

The multiple applied to those earnings reflects how risky and transferable they are. Things that push it up:

• Recurring revenue — contracted or repeat income is worth more than one-off sales
• A business that runs without the owner — documented systems, capable staff
• A spread of customers — no single client that could sink you if they left

Things that push it down are the mirror image: heavy owner dependence, customer concentration, thin documentation.

The uncomfortable truth

A lot of value is destroyed simply because it was never made visible. The recurring revenue nobody surfaced; the add-backs nobody evidenced; the transferability nobody wrote down. Positioning improves the evidence, not the answer — but the evidence is often what's missing.

Curious where you sit? Our indicative range gives you a starting point in a couple of minutes.