Our Approach to Business Valuation

This months article reviews our approach to business valuation here at JS Reakes.

Our valuations are based on over 30 years of experience in the following sectors: 

• Public Houses 
• Restaurants 
• Leisure 
• Care Homes 
• Pharmacies 
• Dental Practices 

Our team provides accurate, market-driven valuations, helping you make informed decisions whether you’re selling, investing, or planning your exit strategy. 

 

Who We Help 

At JSR we work with: 

• Business owners 
• Professional advisors 
• Solicitors 
• Pension scheme administrators 
• Investors 

Whether you’re planning a sale, resolving a dispute, or investing in commercial property, JS Reakes provides the clarity and expertise you need. 

 

Why Business Valuation Matters 

Business valuations are essential for: 

• Selling or buying a business 
• Mergers and acquisitions 
• Raising capital or attracting investors 
• Estate and tax planning 
• Legal disputes or divorce settlements 

 

Key Methods of Business Valuation 

There are three primary approaches we take when valuing a business: 

1. Asset-Based Approach

This method calculates the value of a business based on its net assets. 

– Book Value: Based on the balance sheet, subtracting liabilities from assets. 

– Liquidation Value: The net cash that would be received if all assets were sold and liabilities paid off. 

2. Income-Based Approach

This approach focuses on the business’s ability to generate future income. 

– Capitalization of Earnings: Uses a single period’s earnings and applies a capitalization rate to estimate value. 

3. Market-Based Approach

This method compares your business to similar businesses in the area that have been sold recently. 

– Comparable Company Analysis (Comps): Looks at valuation multiples (like price-to-earnings or EBITDA multiples) of similar businesses. 

– Precedent Transactions: Uses data from actual sales of comparable businesses. 

 

Factors That Influence Business Valuation 

Several qualitative and quantitative factors affect a business’s value: 

• Revenue and profitability 
• Growth potential 
• Customer base and retention 
• Market conditions and industry trends 
• Competitive landscape 
• Intellectual property and brand value 
• Management team and operational efficiency 
• Debt and financial health 

 

Professional Valuation Reports 

Our valuation reports include: 

• A researched and reasoned valuation 
• Market analysis and comparable evidence 
• Compliance with RICS Red Book standards 

Reports are typically delivered within 5–10 working days of inspection, depending on your requirements. 

We are regulated by the RICS. If you require further advice on lease terms, rent reviews, valuation, or need professional advice then get in contact with us on [email protected] or 01179 200090.