Tag
Valuation
63 pages across every collection.
Decision··2 min
What is my business worth?
Upload your financials and receive a valuation report with assumptions, risks and a valuation range. Three methods, every figure traced back to a line in your file.
Article··2 min
Preparing your business for sale
A twelve-month sequence, in the order that actually compounds — what to fix first, what to leave alone, and which preparations buyers can tell were done last month.
Article··2 min
How profitability affects valuation
Margin does not just raise the earnings the multiple is applied to — it raises the multiple itself. Why the effect compounds, and what a five-point improvement is actually worth.
Article··2 min
How recurring revenue affects valuation
Why contracted revenue is worth two to three times what project revenue is worth, the four tiers buyers actually distinguish, and how to move revenue up a tier before you sell.
Article··2 min
What buyers look for
The order a buyer reads your business in, the four questions they are really answering, and what makes them walk away in the first hour.
Article··3 min
Common valuation mistakes
Nine errors that show up in almost every first valuation, what each one costs in euros, and the check that catches it before a buyer does.
Article··2 min
SDE vs EBITDA
Which earnings figure applies to your business, why the multiples attached to them are not interchangeable, and the €400,000 mistake owners make when they mix the two.
Article··2 min
DCF valuation explained
Discounted cash flow without the spreadsheet mysticism — what the discount rate actually represents, why terminal value is usually most of the answer, and when a DCF is worth building.
Article··5 min
Customer concentration: what the evidence actually says
One big customer is supposed to cost you a full turn on your multiple. That figure has no source. What the research does show is different, more specific and more useful.
Article··5 min
Owner dependence: strong logic, no price data
The best evidence that owners matter comes from 13,000 Danish businesses and a natural experiment nobody designed. It says nothing about your sale price, and it is still the most useful thing here.
Article··2 min
Revenue multiple explained
When turnover is a defensible basis for value, what the ranges actually are by business model, and the two situations where using one costs you money.
Article··7 min
The number in the middle that nobody can source
Every risk that supposedly lowers your business value passes through one figure in the discount rate. The profession's own guidance says there is no data source for it.
Article··6 min
The private company discount, and the case against it
Being unlisted is supposed to cost you 20 to 30 percent of your value. The published estimates run from zero to fifty, and the best-identified ones cluster far below what practitioners apply.
Article··6 min
Size moves your multiple more than anything you control
The best-supported finding in SME valuation is also the least useful advice: bigger businesses sell for more. Here is the evidence, and why the causal version of it is probably wrong.
Article··6 min
Where SME multiples actually come from
Every multiple you have read was published by someone selling something. Here is who collects the data, how, and why two datasets covering the same businesses disagree by a factor of two.
Article··3 min
EBITDA multiple explained
What actually sets your multiple — size, growth, concentration and owner dependence — and why the sector average you found online is the least useful number in the calculation.
Article··3 min
How to value a business
The whole process in seven steps — from the earnings figure you start with to the range you end up defending. Written for owners doing this for the first time.
Article··2 min
Revenue multiple or EBITDA multiple?
One of these two methods will flatter your business and the other will not. Which one applies depends on facts about your company, not on which number you prefer.
Article··3 min
How EBITDA affects your valuation
Two companies with identical revenue can be worth three times different amounts. Almost all of that gap comes from what is inside EBITDA — and what should not be.
Answer··1 min
Can I value a business with one year of accounts?
Yes, but the range widens substantially and the multiple drops. Buyers price uncertainty, and a single year gives them no trend to price against.
Answer··1 min
Do I need a formal valuation for the tax authority?
Only where a transaction between related parties has to be shown at arm's length — share transfers, restructurings, gifts and inheritance. Not for deciding whether to sell.
Answer··1 min
How much tax will I pay when I sell my business?
In the Netherlands, selling shares held through a holding BV is normally exempt at the holding level; tax arrives in box 2 when you take the money out personally.
Answer··1 min
What documents do I need for a business valuation?
Three years of accounts, management figures, revenue by customer, contracts and a capex history. Seventy percent of valuation time is spent gathering these.
Answer··1 min
What if my accounts are messy?
It widens the range rather than preventing a valuation. But messy accounts cost real money at sale — they lengthen due diligence and shift the burden of proof onto you.
Answer··1 min
What is an earn-out?
Part of the price paid later, conditional on performance. It is what a buyer proposes when they cannot price a risk — most often customer concentration or owner dependence.
Answer··1 min
How do I prepare my business for sale?
Twelve months, in four blocks: reduce owner dependence, clean the accounts, improve revenue quality, clear the legal ground. The first block matters most and takes longest.
Answer··1 min
When is the best time to sell my business?
After two years of demonstrable improvement, not after one exceptional year. Buyers pay for trends, and a single strong year raises the question of why you are selling now.
Answer··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.
Answer··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.
Answer··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.
Answer··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.
Answer··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.
Answer··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.
Answer··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.
Answer··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.
Answer··1 min
What is the difference between enterprise value and equity value?
Enterprise value is what the operating business is worth. Equity value is what reaches you — after debt is deducted and surplus cash added. The gap is often six figures.
Answer··1 min
What is terminal value?
Everything beyond the forecast horizon, compressed into one number. In an SME discounted cash flow it is usually 60 to 75 percent of the total valuation.
Answer··1 min
What is asset-based valuation?
Net assets restated at realistic values. It sets the floor for most businesses and the actual price only where earnings are weak or the assets are the business.
Answer··1 min
Which valuation method is most accurate?
None of them. Accuracy is the wrong frame — the useful method is the one your buyer will use, and for most SME transactions that is an earnings multiple.
Answer··1 min
Why do valuation methods give different answers?
Because each encodes different assumptions about the future. The gap is not an error to average away — it is the most useful output of the whole exercise.
Answer··1 min
Is EBITDA the same as profit?
No. EBITDA sits above interest, tax, depreciation and every cash movement that is not in the P&L. A business can grow EBITDA every year while running out of money.
Answer··1 min
What discount rate should I use?
18 to 25% for an owner-managed SME. Below 12% implies a predictability most small businesses do not have; above 30% usually means the forecast is the problem, not the rate.
Answer··1 min
What is a DCF valuation?
A method that forecasts future cash flows and reduces each year by a discount rate reflecting risk. For SMEs, terminal value is usually 60–75% of the answer.
Answer··1 min
What counts as a one-off cost?
Something that happened once, will not recur under new ownership, and has a document behind it. Three years of 'one-offs' are operating costs with an optimistic label.
Answer··1 min
What is adjusted EBITDA?
EBITDA restated as it would look under a new owner — owner compensation at market rate, one-offs removed, personal costs stripped. It is the figure valuations actually use.
Answer··1 min
What is EBITDA?
Earnings before interest, tax, depreciation and amortisation — an attempt to measure what a business earns from operating, before the current owner's financing and accounting choices.
Answer··1 min
What is SDE (seller's discretionary earnings)?
The total financial benefit one owner-operator takes from a business in a year — operating profit plus owner compensation, benefits and one-off costs added back.
Answer··2 min
Does company size affect the multiple?
More than any other single factor, and it is the one claim in this field that replicates across four independent datasets on three continents. The reason is the buyer pool.
Answer··1 min
What is an ARR multiple?
Annual recurring revenue times a figure between 3 and 8, used for subscription software. Churn and net revenue retention decide where inside that range you land.
Answer··1 min
How do I find the multiple for my industry?
Published sector averages are drawn from transactions far larger than most SMEs. Confirm the size band before using any comparable — and if you cannot find it, do not use the figure.
Answer··1 min
What is a revenue multiple?
A shortcut that prices a business at a number of times turnover, assuming margin is predictable within a business model. Divide it by your margin to see what it really implies.
Answer··1 min
What is a good EBITDA multiple?
Four to six times for an SME under €2M of EBITDA, two to four below €500k. Where you sit inside the band matters more than the band itself.
Answer··1 min
What multiple do small businesses sell for?
Most businesses under €1M of turnover sell for 2 to 3.5 times SDE. The figure that trips owners up is which earnings number that multiple applies to.
Answer··1 min
Why do some companies sell for higher multiples?
Four reasons account for nearly all of it: size, growth, revenue quality and independence from the owner. Only the first has published numbers behind it.
Answer··1 min
How long does a business valuation take?
Hours for an indicative range once the figures are in one place, two to six weeks for a formal valuation. Most of that time is spent normalising accounts, not calculating.
Answer··1 min
How much does a business valuation cost?
From €9 for an indicative range to €15,000 for a formal signed valuation. The difference is liability, not accuracy — and most owners only ever need the first.
Answer··1 min
Can I value my business myself?
Yes, to within a defensible range. The limit is not arithmetic — it is objectivity about your own assumptions, which is why the workings matter more than the number.
Answer··1 min
How many times profit is a business worth?
Two to six times normalised earnings for most owner-managed businesses — but 'profit' has to mean the right thing, and reported net profit almost never does.
Answer··1 min
What is my company worth based on revenue?
Revenue multiples run from 0.3× to 8× depending on business model — but any revenue multiple is an earnings multiple in disguise, and dividing by your margin reveals which.
Answer··1 min
How do I calculate the value of my small business?
Four steps: normalise the earnings, pick the right earnings figure, apply a size-appropriate multiple, then adjust for debt and cash. Worked example included.
Answer··1 min
How much is my business worth?
Most owner-managed businesses sell for two to six times normalised annual earnings. Where you land inside that range depends on four things you can check today.
Answer··1 min
What is a business valuation?
An estimate of what a business would change hands for between a willing buyer and seller — expressed as a range with its assumptions attached, not as a single figure.
Guide··6 min
Business valuation glossary: every term on this site, in one line
The jargon a buyer, a broker or a valuation report will use, defined in a sentence each, with a link to the longer answer where there is one.