#005 Business Buying Strategies Podcast

May 10, 2018

A question that I get asked all the time from my Mastermind members is how do you value a business.

It's a good question that's very difficult to answer. Why?

Because a big business is worth more than a small business.

So, let's take a step back. The starting point for a business value is a multiple of profit or EBITDA.

A small business with an EBITDA of £100K or less can have a value of 2x to 4x EBITDA.

A bigger business with £1 million EBITDA will have an 8x to 15x value.

The days of getting a 20x multiple disappeared in the 80s with Gordon Gekko.

So, when a potential buyer gave Coffee Nation a 37.5 multiple. Martin Dawes couldn't believe his luck.

But...

The deal fell through inches from the finishing line! Why?

That's what you will find out in this podcast episode. 

You'll also hear:

• What a business seller is looking for in a buyer
• What a buyer should do to prepare for sale
• What you need to demonstrate to the business owner that will make him want to sell to you
• How to calculate the value of a business
• Questions to ask the seller that reveal the health of the business

 

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Disclaimer: Nothing in this podcast should be construed as legal, financial, tax or business advice. The information is for entertainment only and you should always engage suitably qualified professional advisors. Jonathan Jay, the guest presenters and The Dealmaker's Academy Ltd do not take any responsibility for your actions and decisions as a result of this podcast.