Budget 2026: what it means for you and your business —
In short
A business is generally valued by one of three methods: an earnings multiple applied to sustainable profit or EBITDA, a discounted cash flow of expected future cash flows, or a net asset basis for asset-heavy businesses. The right method depends on the sector, the size and the purpose of the valuation — and the assumptions matter far more than the arithmetic. We produce independent, defensible valuations you can act on and defend.
Earnings multiple. Sustainable, maintainable profit (often adjusted EBITDA) multiplied by a market multiple for the sector, size and quality of the business. The most common approach for profitable trading companies — and the multiple is where the argument is.
Discounted cash flow (DCF). The present value of expected future cash flows. Powerful for businesses with predictable cash generation or a clear growth trajectory; highly sensitive to its assumptions, which is both its strength and its weakness.
Net assets. For asset-heavy businesses — property companies, investment holdings — or where a business is not profitably trading.
We usually apply more than one and triangulate. A single method presented as fact should make you suspicious.
This is where value is actually made or lost, and almost none of it is about last year’s profit.
Owner dependence. If the business cannot run without you, a buyer is buying a job, not an asset. This single factor depresses more valuations than any other. Customer concentration. One customer at 40% of revenue is a discount, not a strength. Recurring revenue. Contracted, repeating income is worth a materially higher multiple than project work. Quality of the management team. A buyer is buying the people who stay, not the one who leaves. Clean, credible accounts. Chaotic records reduce price and lengthen deals. Growth prospects, and whether they are credible or merely asserted.
Selling — to know whether an offer is fair before you accept it. Buying in or out a shareholder — where a defensible number prevents a dispute. HMRC — share valuations for EMI options, gifts and inheritance tax must withstand scrutiny. Share schemes — an EMI valuation must be agreed with HMRC. Disputes — matrimonial and shareholder proceedings require independent, expert valuation. Succession and IHT — you cannot plan around a number you don’t have. Simply knowing — most owners have their net worth concentrated in a business they have never had valued.
The gap between a poor multiple and a good one is usually owner dependence, customer concentration and messy accounts — and all three take years to fix, not months. If you’re thinking of selling in three years, the valuation you want is the conversation you should be having now.
Independent and defensible — valuations that survive HMRC, a buyer, or a court.
More than one method, triangulated — a single number presented as fact is a warning sign.
We explain the value drivers — so you know what to fix, and what it’s worth fixing.
All purposes — sale, HMRC, EMI, disputes, succession.
Chartered (ICAEW) — so our work has to stand up to scrutiny.
This page provides general information about the 2026/27 UK tax year and is not advice on your particular circumstances. Tax and regulatory rules change frequently. Please contact us before acting, or refraining from acting, on anything set out here. LMJ Group is a firm of Chartered Accountants regulated by the ICAEW. LMJ Group is not a registered auditor and does not provide audit services. Last reviewed: July 2026.
