When you’re looking to buy a business, one of the first and most pressing questions you’ll ask is: what’s it worth? It sounds simple, but the answer is often distorted before you’ve even opened a set of accounts. Why? Because two voices dominate early-stage conversations—the broker and the seller. Both will happily give you a number, but neither is working from the neutral ground you need to make a sound financial decision.
The truth is, letting either of them anchor your thinking can cost you dearly. If you want to protect your capital and build a sustainable acquisition strategy, you have to start from facts, not fiction.
Why You Shouldn’t Listen to Brokers
Brokers are salespeople. Their job is not to give you a balanced view of what a company is worth; it’s to make the seller feel good enough to sign a mandate and hand over a fee. That’s why brokers often pitch inflated valuations. They’ll ask the seller what number they’d like to hear, then confirm it or even bump it up by 10–20%. No detailed analysis, no accounts reviewed—just reassurance.
Here’s the problem: once a seller has been promised that figure, they believe it. For the next year, they will hold firm, wasting time with buyers who aren’t prepared to meet that inflated price. Meanwhile, the broker collects fees regardless of whether a deal gets done. You end up negotiating against a fantasy, not a financial reality.
If you encounter a seller who’s just signed with a broker, your best move is often to walk away and revisit them later. Give it twelve months. By then, most vendors will have learned the hard way that the “magic price” was never real. That’s when they’re more open to talking in numbers that reflect the business, not a brochure.
Why You Can’t Trust Sellers Either
On the flip side, sellers almost always base their valuation on personal circumstances rather than business fundamentals. It’s human nature. They want to clear their mortgage, fund a retirement, buy the car they’ve dreamed of, or take their partner on a world tour to make up for decades of sacrifice.
All of those are perfectly valid personal goals—but they have no bearing on what the business is actually worth. A company doesn’t suddenly become a million-pound asset because its owner has a million-pound wish list.
When you let the seller’s personal needs influence your thinking, you’re already negotiating from the wrong starting point. You’re paying for their plans, not their profits.
So Where Should You Start?
You start with the accounts. Always.
The backbone of any sensible valuation has two parts:
Enterprise value, calculated as EBITDA (earnings before interest, tax, depreciation, and amortisation) multiplied by an appropriate industry multiple.
Balance sheet reality, which is simply assets minus liabilities.
Add those together and you’ve got a valuation range rooted in the financials, not someone’s dreams.
Here’s an example:
EBITDA: £100,000
Industry multiple: between 2× and 5×
Enterprise value range: £200,000–£500,000
Net assets (assets £1m – liabilities £500k): £500,000
Total valuation range: £700,000–£1,000,000
That’s how you frame a negotiation. Not with “I need a million,” but with “The accounts suggest a range of £700k–£1m.” It changes the entire tone of the conversation.
Neutrality Matters
Even if you know the formula, it’s easy to be swayed. Buyers fall into the trap of tweaking assumptions—upping the multiple, inflating add-backs, downplaying liabilities—just to make the numbers stretch to the price they’ve already half-committed to in their head.
That’s why neutrality is so important. At OnPoint, we don’t look at heads of terms until after we’ve done the valuation. We don’t ask what the seller wants until our report is finished. That way, our clients get a sober, unbiased assessment. Sometimes the valuation comes in lower than the agreed price, sometimes higher—but it’s always factual.
A neutral valuation report isn’t just paperwork. It’s protection. It’s the difference between paying for a business as it is and paying for a dream that might never materialise.
How a Valuation Report Shifts the Power
Imagine you’re negotiating on a company where the seller wants £1.2m. You bring in a valuation report that shows the business is realistically worth £750k–£1m. You don’t argue, you just put the report on the table. Suddenly, the seller is on the back foot. They either have to justify the gap or start rethinking their position.
Now flip it: imagine the report shows a range of £750k–£1m and the seller only wants £500k. You keep the report to yourself. You quietly agree to terms, maybe stretch to a slightly faster payment structure, and walk away knowing you’ve locked in a great deal.
That’s why valuation reports are for your eyes first. They’re tools to give you confidence and strategy, not documents to share unless it helps your negotiation.
Case in Point: The Same-Day Deal
Let me give you a story. A seller rang me on a Monday lunchtime. She needed to retire urgently for medical reasons. Her ask was simple: clear the credit card debt and the director’s loan, nothing more. By 8pm that evening, we’d signed the SPA. By Friday, I was running the business.
That deal happened because I knew how to cut through noise and get to a fair, workable valuation instantly. No brokers. No “what I need for my pension.” Just the accounts and the immediate financial realities. Deals like that prove that when you focus on the numbers, you can move faster and safer.
The Bottom Line
Brokers and sellers will always anchor high, because it’s in their interest. If you let them set the narrative, you’ll end up chasing prices that aren’t rooted in reality. But when you start with EBITDA, industry multiples, and the balance sheet, you anchor yourself to fact. That’s how you protect your capital, keep negotiations grounded, and move with confidence.
Valuation isn’t about meeting someone else’s dream. It’s about protecting your own future.
Call to Action
At OnPoint Accounting, we specialise in independent, neutral valuations that strip out emotion and sales fluff. Our reports are clear, defensible, and fast—usually delivered within 48 hours. Whether you’re at the start of your acquisition journey or mid-negotiation, we’ll give you the facts you need to make smart decisions.
👉 Ready to cut through the noise and get a clear view of what a business is really worth?
Contact OnPoint Accounting today and let’s talk valuations.
Please seek professional advice and guidance when considering implementing the content of this blog, and always advise the seller to seek independent advice.
To learn more about the financial due diligence process in buying a business, why not purchase the book “Buying a Business The Smart Way” By Johann Goree: https://amzn.eu/d/0anwcVBk
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