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Valuations 5

5 different times when you might want your business valued

When you are selling up

When you want to pass the business on

When you want to set up a share scheme

When you are in dispute

When you are getting divorced

There are different moments in the life cycle of a business when you want to know how much it’s really worth. Most accountancy firms are capable of due diligence, the desk-top work that establishes your assets and liabilities. The trouble is most of their reports are nothing more than calculations. (Average profits multiplied by the appropriate Price/Earnings ratio.)

At Sobell Rhodes, whatever your reasons for wanting a valuation, we go behind the numbers to make sure you get the best deal possible. For everyone.

No costs, no obligations, no nonsense

The reasons for business valuations

Selling up

For instance, one client was keen to sell because he wanted to leave the stresses and strains of running a business to become a gamekeeper. Yes, really!

On paper, their business was turning over £25 million but it was making just £250,000 a year profit. By cleaning up their accounting records, migrating bookkeeping to the cloud and showing them how to deal with persistently late payers, we helped them get to £800,000. In taking our advice to be patient for a year, they wound up with a much better deal.

Our job is to maximise the sale price and minimise your tax liabilities.

Passing the business on

When they start to think about retirement, most business owners also start thinking about who might take over the reins. Family? Other shareholders? Loyal employees? Maybe you’re in this situation yourself?

Our first piece of advice is: don’t rush into anything! We have learned over many years that patience really is a virtue.

Before you give away or sell anything, how much do you want to take out of the business yourself?

Do you want cash now or are you happy to take it over a period of years?

We also make sure you are not hit by unexpected Inheritance Tax or Capital Gains Tax liabilities.

Our job is to help you negotiate the minefield.

Share schemes

As an example “Ted” works for “XYZ” company and is very good at his job. Frank, who owns the company, wants to tie Ted in. But how? If he pays Ted big bonuses, as much as 47% of the money will disappear in taxes. If he gives him shares, Ted will get a hefty tax bill he can’t afford and may have to wait years before he can sell them.

In this instance, the solution could be Growth Shares. They’re a relatively new way of rewarding people (not just employees) in the success of the company from the day they are issued. Obviously, they have to be valued accurately or, later on, HMRC will want to know why.

Our job is to set up the incentive scheme that works for you.


Shareholder battles are often deeply distressing for everyone involved. They can involve friends who have fallen out or families at loggerheads with each other.

One property company came to us for mediation. An uncle and his nephew were trying to divide the business so they could go their separate ways. They could either go to court, which would cost them as much as 40% of the business, or they could make sealed bids for the properties they particularly wanted.

They took our advice and for the price of a few envelopes we saved them hundreds of thousands of pounds.

Our job is to bring common sense to bear.


A client came to us to ask for help. In their divorce proceedings his wife had had her business valued. The valuation was, he said, “derisory”.

It didn’t take long to find that the lady had been “losing” all the costs of her several horses, stables and vet bills in the accounts.

Once again, common sense prevailed. By establishing the true value of the business, we helped our client get a fairer settlement. And, arguably, helped his former wife stay out of serious trouble.

Our job is to come up with solutions that both parties can accept.

If you’re interested in determining the market value of your business for any reason, talk to one of our partners. A 15-minute no-obligations call could be helpful and very valuable.

No costs, no obligations, no nonsense

” One of the best reasons I can think of for getting your business properly valued by Sobell Rhodes is so you don’t get bullied. I was selling a company and the price I agreed was £500,000. On the day of the deal, their CFO tried to tell me he would only pay £350,000, take it or leave it. Because I knew what the company was really worth, I was able to leave it. I sold later to someone else for a fair price.”


Anonymous Tax Customer

Other services include

Valuations for law firms and courts

Our advice, when business owners bring disputes to us, is to do everything possible to keep matters out of court. However, there are plenty of occasions when matters have already gone to law and when solicitors and legal firms engage us to help them prepare the case for their clients.
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Our role in these instances is to apply forensic accounting techniques to establish the true facts as they apply to the client’s position.

“You give us the bullets to fire at the other side,” one lawyer told us.

Because we are well-known for the quality of our detective work, we are also often asked by the court to bring both clarity and impartiality to a hearing.

If you’re a solicitor wondering if we can help you with a case, the best way to find out is to call 020 8429 8800.

Valuations when buying a business

If you’re buying a business, it pays to be prudent. For instance, one client asked us to do due diligence on a company they were interested in acquiring. Tucked away in their files we discovered the company had been responsible for a chemical spill. While they had not been fined yet, there was the potential of it.

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Fines for pollution are unlimited and even if the individuals at fault move on, the company can still be prosecuted. We raised the red flag. Our client did not proceed with the acquisition.

Valuations for in inheritance purposes

Not just when someone dies but when business owners are working out how their dependants can benefit from their hard work, their assets and liabilities need to be valued. This can be massively complex if the estate includes property, assets in trust and belongings overseas.
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Inheritance tax, IHT, is 40% of the estate. But there are ways to reduce this.

One business owner in his 60s transferred shares to his children. Seven years later he was able to transfer a further tranche. And again seven years later. These PETs (potentially exempt transfers) have saved his descendants a great deal of money.

Call 020 8429 8800 if you want to know more.

No costs, no obligations, no nonsense