Accountants and brokers will often pluck a figure out of the air based on the EBITDA (or pre-tax profit) with a multiple applied (depending on the industry/sector). So a firm making £100,000 pre-tax profit with a 3 x multiplier would be valued at £300,000.
However, the level of successful exits/acquisitions in the home improvement industry is among the lowest of any industry, for two main reasons;
When a buyer assesses your business as a potential acquisition, they will ask;
At Sustainium, we have decades of experience in the home improvement industry and we understand how it works. This means, if you do sell your business to us, it is in safe hands.
Our team will make a valuation and offer based on many different factors, and we are in a position to move quickly.
Businesses can accumulate cash because the high cost of dividend tax makes it unattractive to take funds out of the business. However, by structuring the deal correctly, the owners can sell their business and extract cash benefiting from a significant reduction in tax using the new government Business Asset Disposal Relief (previously Entrepreneurs Relief).