Business Brokers Valuations Aren't Just a Valuation
- markblayney8
- Apr 19
- 3 min read
There’s a saying that ‘A valuation is just a valuation’ meaning that the only real valuation of a business is what someone actually pays for it.
But quite often a business brokers valuation is actually a sales tool brokers use to win sale mandates and achieve sign up fees.
Porky Pies
A few years ago two owner managers asked to meet as they wanted some advice about selling their artisan food business.
We talked and they explained how they’d founded the business and grown it over the years, but that now they’d decided they needed to look at retirement. So they’d met with a brokerage firm who’d given them an estimated value for the business and were keen to sign them up.
I explained the main valuation approaches such as multiple of earnings and I asked about annual profit, which they told me was around £100,000 on a turnover of around a million, so a respectable 10%.
Then I asked about their salaries and it turned out they were only taking up to the Lower Earnings Limit for National Insurance (which at the time of writing is currently £6,500 per year). It’s not an uncommon approach as it lets owners maintain NI credits without paying employee or employer contributions.
As a result though, the rest of their earnings came out as dividends from that profit figure.
I explained that any potential buyer was going to need to factor in a level of management salaries to replace the two departing owner managers, and they agreed it was pretty clear that after allowing management costs there was actually little or no profit on which to apply a multiple.
Which they also agreed made it quite hard to figure out how the advised value of one million pounds had been arrived at.
‘Thank you for that,’ they said at the end of the meeting, ‘we knew we didn’t believe it but couldn’t figure out why.’
If they had gone ahead at that valuation I very much doubt the business would have sold.
It wouldn’t have stopped the broker taking their listing fee however, or the owners being liable to whatever long term success fee criteria was buried in the broker’s T&Cs.
So if the valuation seems too good to be true, beware!
Business Brokers Valuations, I Wouldn't Start From There
If your business has been on the market for months and nothing is happening, the problem usually isn’t demand, it’s the exit strategy.
Owners come to us saying:
“There are no buyers for my business”
“We can’t find serious buyers”
“There’s interest, but no real offers”
“The business has been on the market too long”
If that’s you, stop assuming the business is the issue.
When There’s No Interest, Exposure Isn’t the Answer
Most unsold businesses weren’t positioned to exit, they were listed, usually at an unrealistic price.
More marketing? More time?
None of that is going to fix the real problem.
In the £2m–£10m range, buyers don’t chase listings. They engage when risk is removed and structure and pricing makes sense.
If buyers aren’t stepping forward, it’s because the exit hasn’t been engineered to attract buyers.
We Create Exits, Not Listings
FailedBusinessSale.co.uk from Resolution Incorporated exists to give owners a way out when no buyers appear.
We are not:
Brokers
Intermediaries
“Exposure” providers
We structure exit outcomes for businesses that haven’t attracted real buyers.
That can include:
Restructured exit routes buyers will actually engage with
Partial or staged exits that create traction
Transactions designed to reduce buyer hesitation
Outcomes that prioritise certainty over optics
The objective is simple: You exit the business.
Who This Is For
✔ UK owners
✔ £2m–£10m turnover
✔ Owner-managed businesses
✔ On the market too long, with no real interest
Confidentiality is absolute.
Stop Waiting for Buyers Who Aren’t Coming
If your business has attracted no serious buyers, repeating the same approach will only extend the stalemate.
There is a way out, but it requires structure, not more exposure.
Take the Next Step, Confidentially
If your business sale has produced no buyers or no real interest, we’ll tell you what exit is still possible now.
👉 Request a confidential exit discussion (UK owners | £2m–£10m turnover only)
Contact: Mark Blayney 07769 686450 mark.blayney@resolution-inc.ltd
Photo by Mathias Reding on Unsplash
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