Fiducia TogetherBusiness valuation methods
The main ways a business is valued, and when each applies.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Common methods: a multiple of EBITDA or profit, a multiple of revenue, discounted cash flow, asset-based, and entry cost.
Why it matters
Different methods give very different answers for the same business, which is why a valuation is a negotiation informed by arithmetic rather than a calculation.
What it looks like in practice
Profit multiples suit established businesses; revenue multiples suit fast-growing ones with recurring revenue; asset-based suits property-heavy or distressed businesses.\n\nSector multiples are published and are the starting point.
What to watch out for
Valuing on turnover in a low-margin business, which flatters enormously. And valuing an owner-dependent business on a multiple that assumes management continuity.
Where to get proper advice
A corporate finance adviser. Your accountant can normalise the figures a buyer will work from.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.