Business valuation services

Expert – Professional – Reliable

Business Valuation Services

Independent business valuation services from London chartered accountants

For most owners, the business is the single largest asset they hold — and the one they know the least about in pound terms. A figure from a broker, a multiple mentioned by a competitor, or a number generated by an online calculator is not a valuation. A valuation will often draw on more than one method, with the different approaches considered together to arrive at a balanced and well-supported conclusion.

Accendo provides business valuation services to company owners, directors, shareholders and their advisers across the UK. We produce independent, properly reasoned valuations that hold up when it matters: in a sale negotiation, in front of HMRC, in a shareholder discussion, or in front of a bank.

We are a London-based firm of chartered accountants and statutory auditors, registered as auditors in the United Kingdom by the Association of Chartered Certified Accountants. That background is directly relevant. A valuation is only ever as reliable as the figures beneath it, and we are used to testing whether reported profit, stock, provisions and revenue recognition actually stand up before building anything on top of them.

When you need a formal valuation

Selling the business — establishing a defensible asking price and understanding what drives it

Buying or investing — testing whether the price on the table is supportable

Management buy-outs and buy-ins — pricing a transfer between parties who both know the business

Share issues, transfers and reorganisations — including group restructuring

EMI and other share schemes — valuations prepared for HMRC agreement

Shareholder exits and disputes — where a fair value needs to be established between parties

Probate, inheritance tax and gifting — where HMRC requires a supportable figure

Divorce and matrimonial settlements — where an interest in a company forms part of the assets

Raising finance — supporting equity discussions with investors or lenders

Succession and exit planning — establishing a baseline value and building on it

How we approach a valuation

There is rarely a single valuation method that answers every question. A properly reasoned valuation normally considers more than one basis and reconciles the results. We normally run more than one basis and reconcile the results.

Earnings-based valuations apply a multiple to maintainable earnings. The work sits in the word maintainable: adjusting reported profit for one-off items, non-commercial director remuneration, personal costs and related party arrangements to establish what the business genuinely earns on a repeatable basis.

Discounted cash flow models future cash flows back to present value, and suits businesses with predictable cash generation or a clear growth trajectory.

Asset-based valuations restate the balance sheet to market values, and are usually appropriate for property-holding, investment or loss-making companies.

We then consider the factors that adjust the headline figure: customer concentration, dependence on the owner, contract quality, the strength of the management team below board level, and whether the shareholding being valued carries control.

Clear reports, senior involvement

You receive a written report explaining the figure, the method, the assumptions and the sensitivities — in language you can use in a negotiation, not a spreadsheet with a conclusion bolted on. Senior people do the work and talk you through it.

Where Accendo acts as auditor to an entity involved, we consider applicable ethical and independence requirements before accepting valuation or advisory work.

Speak to our valuation team on 0207 523 5356, or book a consultation.

Frequently Asked Questions

We normally value on more than one basis and reconcile the results, because a single method applied in isolation tends to produce a figure that cannot be defended when challenged.

Most trading companies are valued on an earnings basis: a multiple applied to maintainable earnings, usually adjusted EBITDA or post-tax profit. Establishing maintainable earnings is the substantive work. We adjust reported profit for items that will not recur after a sale — one-off legal costs, exceptional contracts, personal expenditure run through the company — and normalise director remuneration to a genuine market rate for the role. Owner-managed businesses frequently pay directors well below or well above commercial levels, and neither reflects what a buyer would actually have to pay.

The multiple itself is drawn from comparable transactions in the sector, adjusted for the size, risk profile and growth prospects of the business in question. Smaller companies attract lower multiples than larger ones in the same sector, and a business dependent on one customer or one person attracts a lower multiple than a diversified one.

Discounted cash flow and asset-based approaches provide cross-checks, and in some cases become the primary method.

An earnings-based valuation prices the profit stream: what a buyer would pay for the right to receive future earnings. An asset-based valuation prices what the company owns, restating the balance sheet from historic cost to current market value.

Profitable trading businesses are almost always worth more than their net assets, because the goodwill, customer relationships, brand and workforce generate returns that never appear on the balance sheet. For these companies, the earnings basis governs and the asset position acts as a floor.

The asset basis takes over where the earnings stream is weak or absent. Property investment companies, holding companies, businesses making sustained losses and companies being wound down are all valued on assets. So too are businesses where net asset value simply exceeds any earnings-based figure — no rational seller accepts less than the company could realise by selling everything and closing.

Surplus assets sit alongside either method. Where a trading company holds cash, property or investments beyond what the trade requires, those are typically valued separately and added to the earnings-based figure.

Free calculators are useful for a rough sense of scale, and no further than that. They apply a generic sector multiple to a figure you type in, and every element of that process is where the real work should be.

They cannot adjust your profit for one-off costs, personal expenditure or non-commercial director salary — so they multiply a number that no buyer would accept as your true earnings. They cannot assess customer concentration, contract length, owner dependence or the depth of your management team, all of which move the multiple materially. They cannot value intangibles: brand, intellectual property, recurring revenue, or a skilled workforce. And they cannot distinguish between a controlling shareholding and a minority stake.

The practical risk runs both ways. Owners who overestimate value take a business to market, spend six months and considerable professional fees, then discover no buyer will approach the figure. Owners who underestimate accept a first offer well below what the business would have achieved.

For anything with real consequences — a sale, an HMRC submission, a dispute — a calculator output carries no weight.

Fees depend on the size and complexity of the business, the purpose of the valuation and the level of scrutiny it will face. A valuation for internal planning purposes at a single trading company sits at the lower end. A valuation of a group with multiple entities, or one that will be submitted to HMRC or used in a contested situation, requires considerably more work and documentation.

We quote a fixed fee against an agreed scope before starting, so you know the cost in advance. We are also happy to say when a full formal valuation is not warranted. Where an owner simply wants a realistic sense of value before deciding whether to explore a sale, a shorter indicative exercise is often the proportionate answer, with a full report commissioned later if you proceed.

On timing, two to four weeks from receiving complete information is typical for a straightforward company. Groups, poor records or a valuation date requiring historical reconstruction take longer. Delays almost always come from waiting on information rather than from the analysis itself.

The starting point is three years of statutory accounts, the most recent management accounts and trial balance, and the current year forecast or budget with its underlying assumptions.

Beyond that, we typically request an analysis of revenue by customer and product, aged debtor and creditor listings, details of director remuneration and benefits, any related party arrangements, property leases and ownership details, loan and finance agreements, the company’s articles of association, and any shareholders’ agreement. Where a specific shareholding is being valued, we need the full share register and details of any rights attaching to different share classes.

We will also want a conversation with you. Accounts describe what has happened; they rarely explain why. Whether a margin decline reflects a pricing decision, a change in mix or a lost contract makes a substantial difference to the multiple applied.

Where records are incomplete, we work with what exists and state plainly what could not be verified. An honest limitation is more valuable than a confident figure resting on unreliable data.

Often, yes, depending on the purpose and tax consequences. For EMI options, agreeing a valuation with HMRC is voluntary but often useful for tax certainty. For connected-party share transfers, gifts, trusts, probate and inheritance tax, a properly supported market value may be needed if the position is reviewed.

For EMI share option schemes, an agreed valuation establishes the market value of the shares under option, which determines the tax treatment for your employees. HMRC operates an advance agreement process, and a valuation submitted with proper supporting reasoning is far more likely to be accepted without extended correspondence.

For share transfers between connected parties, gifts of shares, and transfers into trust, HMRC applies market value rather than the price actually paid. A supportable valuation prepared at the time is your evidence if the position is later reviewed.

For probate and inheritance tax, an unquoted shareholding must be valued as at the date of death. These valuations attract genuine scrutiny, particularly where business relief is claimed.

Tax valuations also apply specific principles that commercial valuations do not — most significantly the treatment of minority interests, where discounts are applied that a commercial buyer of the whole company would never consider. Our tax and valuation work is handled together for this reason.

Because control has value, and a minority shareholder does not have it. This surprises a great many shareholders, and it is one of the most common sources of disagreement in valuation.

A shareholder holding 20% generally cannot appoint or remove directors, cannot set their own remuneration, cannot force a dividend, cannot block a special resolution, and cannot compel a sale of the company. They receive whatever the majority decides to distribute. Shares in a private company are also difficult to sell, because there is no market and the buyer pool is usually limited to existing shareholders.

Valuers reflect this through a discount for lack of control and a discount for lack of marketability. Combined, these commonly reduce a minority holding well below its arithmetic proportion of total value, with the size depending on the specific rights attaching to the shares.

The articles of association and any shareholders’ agreement matter greatly here. Pre-emption rights, drag-along and tag-along provisions and prescribed valuation mechanisms can all change the analysis, and sometimes override the default position entirely.

Valuations are routinely required in both situations, and the standard applied differs from an open-market sale valuation.

In shareholder disputes, the articles or shareholders’ agreement often specify a basis — “fair value”, frequently with a direction as to whether minority discounts apply. That drafting can change the answer very substantially, so the documents are the first thing we read. Many disputes settle once both parties see an independent, properly reasoned figure, which is usually a better outcome for everyone than a contested process.

In matrimonial matters, an interest in a private company forms part of the assets to be considered, and the court is generally concerned with value to the holding party as well as with liquidity — how much can realistically be extracted, and over what timescale, without damaging the business.

Where a matter is heading towards formal proceedings, expert evidence must meet particular procedural requirements. We are happy to discuss the scope of what we can provide and, where a dispute calls for a specialist forensic or expert witness appointment, to say so at the outset rather than partway through.

This is the most useful question an owner can ask, and it is best asked two to three years before a sale rather than two months.

Reduce owner dependence. A business that cannot operate without you for a month is worth less than one with a management team capable of running it, because the buyer is acquiring a job rather than an asset. Building the layer below you is usually the single highest-return action available.

Reduce customer concentration. Where one client represents 30% or more of revenue, buyers apply a discount or push the risk into an earn-out. Diversifying the base directly lifts the multiple.

Improve earnings quality. Recurring, contracted revenue is valued more highly than project work of the same value. Long-term contracts, retainers and subscriptions all justify a stronger multiple.

Clean up the financial record. Reliable management accounts, clear separation of personal and business costs, resolved tax positions and tidy statutory records reduce the risk a buyer perceives — and remove the findings that get used against you during due diligence.

Call 0207 523 5356 or book a consultation to discuss a valuation.

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What People are Saying

Don’t just take our word for it – hear from our satisfied clients who have experienced our exceptional service firsthand.

I would like to thank you for the exceptional services provided. The dedication and expertise displayed by the team have been nothing short of fantastic. Your assistance has been invaluable, and the quality of work delivered has consistently exceeded our expectations.

Carol
As a medium-sized company, we have found, Accendo, to be an invaluable partner in navigating the complexities of accounting, financial reporting, and tax compliance. The team at Accendo consistently demonstrates a high level of professionalism, efficiency, and expertise in their services. Their in-depth knowledge and understanding of our business have been instrumental in helping us manage our financial operations effectively. They have a unique ability to identify and address our specific needs, offering tailored solutions that add significant value to our business. Furthermore, we have been particularly impressed with their responsiveness and commitment to our success. Accendo has consistently gone above and beyond to ensure that we receive timely and accurate advice, enabling us to make well-informed decisions and maintain compliance with all relevant regulations. Their unwavering dedication to providing exceptional services has not only helped us achieve our financial goals but has also given us the confidence to pursue new growth opportunities. We wholeheartedly recommend Accendo to any business seeking a reliable and knowledgeable accounting partner.
Integrated Technology

We recruited Accendo to run our Audit this year, our accounts are complex and we have a huge amount of restricted projects running. Asif and his team were very approachable, professional and completed our audit to our tight deadlines. I highly recommend Accendo and we will be using them for future audits.

Rosie Wren

I have used Accendo as my company auditor for a few years now. Communication is always clear and helpful, I feel audited at the end of the process, in a positive way, and they keep to any agreed timetable. I definitely recommend them.

Wendy Courtenay

We have been working with ACCENDO for the past three years. As auditors of our business MPDFM, we found them to be a very professional audit firm.

Mohammad Bhatti