Started on September 26, 2021

Your retirement. Your legacy. Your future.

Value is more than a number.

At JL Investment Group, we believe valuation is the logical starting point. It is also the basis for strategic planning that will build value in your business prior to selling.

Essentially the value of a business is whatever someone is willing to pay for it. There are a number of accepted techniques that can be used when valuing a security business. Whilst companies in many industries are assessed using their EBITDA (earnings before interest, tax, depreciation and amortisation) value multiplied by an agreed figure, other companies are valued on a multiplier of their recurring monthly revenue (RMR).

Which method is used to value your company depends on your company’s business model. If your business mainly revolves around one time fee, then the EBITDA method may be more appropriate. However if your business hinges on ongoing contracts with clients post installation, then a multiplier of RMR could provide a more accurate view, as the main asset is not, in fact, their gross sales.

With both methods an important consideration is the multiplier that is applied to either the EBITDA or RMR value. There are a number of factors to take into account which could either increase or decrease the multiplier value.

This could include:

  • The number of residential versus commercial clients, as this can affect the longevity of contracts and recurrence of jobs
  • The type of contracts that any recurring clients were signed up to, whether or not these include acquisition clauses for a change of ownership
  • Company attrition rate
  • The use of specialised versus mainstream equipment

Weather you’re ready to sell today – or ready to start planning for a future sale – It all starts with understanding how buyers will value your business.

– Owners who are ready to sell.
– Owners who are planning to sell in the next 6-36 months.
– Owners who want to increase the value of their business.
– Internal decision making
– Profitable businesses (£200K+ pre-tax Net Income)

– Estate planning
– Tax purposes
– Divorce or litigation
– Bankruptcy
– Distressed businesses
– ESOP’s
– Reports required to be certified