FAQ
Value drivers
8 published.
·1 min
Does my industry affect my multiple?
Less than owners expect. Sector sets a rough band; size, concentration, revenue quality and owner dependence decide where inside it you land — and that spread is wider than the gap between sectors.
·1 min
How much do customer contracts increase value?
Nobody has published a number. What a contract does is convert an assumption a buyer has to make into a fact they can read, and the four terms below decide whether it works.
·2 min
Does my business being dependent on me lower the price?
No published study puts a number on it. What is measured is that CEOs move operating performance, and that dependence narrows the buyer pool, which is the more concrete cost.
·1 min
Does working capital affect valuation?
Yes, through the working capital peg — the normal level a buyer expects to come with the business. Anything short is deducted from what you receive.
·1 min
How does debt affect the sale price?
It is deducted from enterprise value, euro for euro. But buyers define debt more broadly than owners do — leases, tax owed and shareholder loans usually count.
·2 min
Does customer concentration lower my valuation?
The direction is well evidenced and the size of the effect is not. Concentration raises a buyer's cost of capital and reduces the number of bidders, which is where the money goes.
·2 min
How does growth affect valuation?
Growth raises the earnings a multiple is applied to, which is certain. Whether it raises the multiple itself is far less well evidenced than the figures in circulation suggest.
·2 min
How does recurring revenue affect valuation?
Predictable earnings are worth more, and the finance research supports that. No published study measures how much recurring revenue adds to a small business multiple.