The purpose of a SME valuation is to arrive at a realistic value that will, firstly, satisfy the owner and, secondly, catch the attention of a prospective buyer. It is very important, therefore, that the valuation presented is market related and is within the price expectations of both the owner and the prospective buyer.
Valuing a SME is challenging because:

• There is no publically available historical market information relating to the sale and purchase of SMEs. This can be compared to the real estate and stock exchange markets where comprehensive sales data is available through estate agent / Property24 websites and the financial publications / stock exchange respectively;
• The SME market is relatively small in terms of volumes, is spread over a wide geographical area and comprises many different types of business. In contrast, the property market is large, geographically focused and very competitive. In terms of the stock exchange, pricing is very competitive and market driven by sector.

Each SME is unique and valuing a SMEs requires extensive use of professional judgement and sound business experience as so many subjective assumptions have to be made in the valuation process.

The professionals best positioned to value a SME are its professionally qualified auditor or accountant or an experienced business broker. We fit both profiles as we have a business brokerage within our stable. Accountants have the technical skills whilst the business broker profession focuses on, and has a much better appreciation of the market dynamics because they deal with this on a daily basis.

We are, therefore, ideally placed to assist with the valuations of businesses.