Understanding what your business is worth and how it is likely to perform in different scenarios is central to every major decision you make. Business valuation and modelling provide a realistic view of value today and create a forward-looking picture that supports planning, funding, deals and succession. Whether you are preparing to raise investment, exploring an acquisition, settling a shareholder dispute or thinking about passing the company to the next generation, these disciplines give you – and your stakeholders – the confidence to act.
In the UK, scrutiny from lenders, investors and HMRC means assumptions must be evidence-based and methodologies must stand up to challenge. The numbers also need to reflect real commercial conditions. For example, UK business investment rose by 3.9% in Q1 2025 and stood 6.1% higher than a year earlier, highlighting the renewed appetite for capital spending and the importance of robust cases for funding (ONS, 2025). At the same time, the five-year survival rate for businesses born in 2018 was 39.4% – a reminder that resilience and disciplined planning matter (ONS, 2024). Sound business valuation and modelling help you balance opportunity with risk so decisions are timely, proportionate and well supported.
As chartered accountants advising UK and European clients, we combine technical standards with practical insight. From independent valuations to integrated financial models linked to your management information, our aim is clarity – so boards, buyers, sellers and families have a shared, defensible view of value, performance and risk.
When do you need business valuation and modelling?
You will typically require business valuation and modelling at key milestones or where stakeholders need a fair, objective view.
- Sale of a company: Establishing a defensible price range, supporting diligence and negotiation.
- Investment or debt raise: Demonstrating returns, headroom and downside protection to investors and lenders.
- Management buy-out or buy-in: Aligning price, funding structure and incentive design with realistic forecasts.
- Succession and tax planning: Valuing shares for gifting, probate or family reorganisation, and testing the affordability of exit payments.
- Shareholder or matrimonial disputes: Providing an independent expert view for negotiation or the court.
- Employee share schemes: Setting option prices and evidencing market value for HMRC purposes.
- Strategic reviews: Assessing performance by division or product, allocating capital and prioritising growth.
For a deeper look at our valuation work, see our business valuations page, and for forward plans, our profitability forecasting service.
How valuations are determined
Valuation is not a single number pulled from thin air. It is an evidence-led estimate produced using recognised approaches and cross-checks.
- Income approach (discounted cashflow): Projecting free cashflows, applying a discount rate that reflects time value and risk, and calculating a terminal value.
- Market approach (multiples): Selecting relevant peer companies or transactions, applying earnings or revenue multiples and adjusting for differences in size, growth and risk.
- Asset-based approach: Valuing net assets, often relevant for property or investment entities and distressed situations.
Adjustments can be as important as the method itself. Common examples include normalising owner salaries or one-off costs, reflecting control premiums or minority discounts, and applying a discount for lack of marketability where shares are not readily traded. Where tax is in point, HMRC’s shares and assets valuation team may review or agree values – for example, via a post-transaction valuation check – so documentation and reasoning must be clear and consistent with published guidance.
What good financial modelling adds
Valuation provides a point-in-time estimate; modelling explains the path. A robust model links your profit and loss, balance sheet and cashflow, and answers the questions stakeholders will ask.
- Scenarios: Base case, downside and upside to show sensitivity to sales, margins, interest rates and working capital.
- Funding: Covenant headroom, debt service coverage and timing of repayments under different interest and trading conditions.
- Investment cases: Payback period, internal rate of return and break-even for new products, locations or acquisitions.
- Operational planning: Hiring schedules, pricing changes and supplier terms translated into monthly cashflows.
Effective business valuation and modelling use consistent drivers and audit trails so anyone can understand how outputs are derived. We also recommend version control and model reviews by someone not involved in the build to reduce error risk.
Benefits for stakeholders
Clear valuation and modelling outputs make decision-making faster and reduce disagreements.
- Owners and boards: A shared view of value, realistic options for exit timing and proceeds, and visibility of risks.
- Investors and lenders: Confidence that returns and downside cases are properly assessed, improving your chance of securing capital on acceptable terms.
- Management teams: Practical targets and key performance indicators aligned to cashflow, not just profit, supporting better day-to-day decisions.
- Employees: Fair pricing for options and clearer communication about how value is created.
If you are exploring M&A, our mergers and acquisitions specialists can work alongside your corporate advisers to keep value, funding and integration plans aligned.
Getting the assumptions right
Assumptions drive outcomes, so they must be credible and sourced. Consider the following.
- Market evidence: Peer multiples, sector growth and input costs, with references saved for the file.
- Historic performance: Trends in revenue quality, churn, gross margin and overhead leverage.
- Capacity and constraints: Headcount, supply chain, inventory and debtor profile.
- Tax and dividends: Corporation tax timing, reliefs and distribution policy reflected in cashflows.
- Governance: A model dictionary, checks for circularity and separation of inputs from calculations.
Documenting these points makes the valuation more resilient, especially if it will be scrutinised by HMRC, a court or external investors. It also helps future updates – for example, after a significant contract win or a change in financing.
Make informed decisions with confidence
Strong management teams don’t guess – they test, evidence and decide. That is what business valuation and modelling enable: a credible view of value today and a plan you can stand behind tomorrow. If you are preparing for a sale, raising funding, planning succession or resolving a dispute, we can provide independent valuations, integrated models and clear reporting tailored to your stakeholders. Talk to us about how we can help you move from uncertainty to action.
If you would like an initial conversation about business valuation and modelling, contact us to discuss your goals and timescales – we will explain the options and what good looks like for your situation.