What is your business actually worth?
Most small UK businesses sell for a multiple of their adjusted annual profit. This calculator applies the method professionals use — honestly, including why every answer is a range and not a number.
Business valuation calculator
Want this as a proper one-page valuation memo?
Pop your email in and we'll send a short written memo of your figures — the adjusted profit, the multiple, what would move it up — prepared by a chartered management accountant. Free, no obligation, no follow-up barrage.
How professionals actually value a small business
Nearly every profitable UK small business changes hands on the same arithmetic: adjusted profit × a sector multiple. Everything else — the negotiations, the surveys, the sleepless nights — is argument about those two numbers. As a chartered management accountant who reads accounts for a living (and whose family company buys businesses), here is the honest version.
Step one — adjusted profit, not headline profit
Buyers start with your profit before tax, then adjust it to show what the business earns for a new owner. Your own salary and benefits are added back; a market-rate cost of replacing you is deducted; one-off items (a legal dispute, a Covid grant, your car) are stripped out. The result — sometimes called adjusted EBITDA or seller's discretionary earnings — is usually higher than the profit in your accounts. Sellers who don't prepare this figure leave money on the table before the first meeting.
Step two — the multiple
The multiple reflects how risky and transferable those profits are. Typical ranges for UK businesses selling for under £5m:
| Sector | Typical multiple of adjusted profit |
|---|---|
| Retail & hospitality | 1.5 – 3× |
| Trades & contracting | 2 – 3.5× |
| E-commerce | 2.5 – 4× |
| Professional services & agencies | 3 – 4.5× |
| Manufacturing & engineering | 3 – 5× |
| Care & regulated services | 4 – 6× |
| Software & recurring revenue | 4 – 7× |
Indicative ranges for guidance, not a promise — individual deals fall outside them for good reasons.
What moves you up the range
Recurring or contracted revenue; a spread of customers (no single client over ~20% of sales); a team that runs without you; clean, current accounts; growth. What drags you down: owner-dependence, one dominant customer, declining numbers, messy books, and — the quiet killer — a forced timetable. A business sold in a hurry is a business sold at a discount.
When the multiple method isn't the answer
Loss-making or break-even businesses tend to sell for asset value — equipment, stock, debtors — sometimes with a small goodwill payment. Property-rich businesses are often split: the property valued separately from the trade. And genuinely unique situations (a licence, a location, a strategic buyer) can break the arithmetic entirely — upwards.
Thinking about selling — or just curious?
Edwards Bros is a Huntingdonshire family company, trading since 1958 — and alongside our own divisions, we buy good small businesses, particularly where an owner is retiring and wants the thing they built to carry on properly. If your numbers look anything like the calculator above, we'd genuinely like to hear from you — a conversation, not a broker's pitch, and no fees in any direction.
This page is general information, not financial, tax or valuation advice, and no calculator can price your specific business. Edwards Bros (Spaldwick) Ltd, registered in England & Wales no. 00598511. If you submit your email, we use it to send your memo and reply — nothing else.