What’s my business worth? Built a tool for UK SMEs — looking for feedback

[henryd]

Hi everyone,

I’ve just launched an early version of Handover, a tool that calculates the value of UK small and medium businesses, and I’m looking for a few business owners to try it and give early feedback.

I can’t post links yet, but it’s on my profile, or just reply here and I’ll send it over.

It takes a few minutes to complete. You answer questions on revenue, margins, growth and sector and it produces a valuation range based on typical industry multiples, along with a breakdown of what’s driving that value.

I built it after speaking to a number of owners who had no clear benchmark for what their business was worth until they were already in the process of selling or speaking to advisors.

The aim is to give owners a clear starting point and show what actually moves valuation over time.

If you run a business, I’d really value your thoughts:

• does the valuation reflect your business
• are the questions the right ones
• what’s missing or not useful

Happy to take any honest feedback, good or bad.

Thanks

 

[Gecko001]

Calculating a value of a business is very near impossible. It is only worth what someone is willing to pay for it.

There is no one typical business. They vary from say a dentist's practice to a financial adviser, to a small manufacturer, influencer to a Vlogger, to a pet shop. Then there are other variables such as bricks and mortar vs online, in-town vs out-of-town, eBay vs Amazon, family firm vs non-family, partnership vs Ltd, sole trader vs non-sole trader etc.

 

[fisicx]

Tried the tool but it needs me to create an account so I left.

 

[henryd]

Calculating a value of a business is very near impossible. It is only worth what someone is willing to pay for it.

There is no one typical business. They vary from say a dentist's practice to a financial adviser, to a small manufacturer, influencer to a Vlogger, to a pet shop. Then there are other variables such as bricks and mortar vs online, in-town vs out-of-town, eBay vs Amazon, family firm vs non-family, partnership vs Ltd, sole trader vs non-sole trader etc.

we’ve actually spent quite a bit of time working through a lot of those variables and trying to bring some structure to it

"Calculating a value of a business is very near impossible" is kind of the core problem we’re trying to address. from what i’ve seen both buyers and sellers often find the whole process pretty opaque

i know a lot of businesses that have sold well under what they probably should have, and others that have gone for surprisingly high valuations, often just down to how they were positioned or negotiated

what we’re trying to do with handover is give owners a clearer starting point, and highlight things that might be holding the valuation back (like heavy owner dependence, customer concentration, that kind of thing)

definitely not trying to say it’s exact, more just making it a bit more understandable and less guesswork

would be interesting to hear how you normally approach valuing a business

 

[henryd]

Tried the tool but it needs me to create an account so I left.

ah yeah that’s fair, appreciate you trying it

the account step is mainly so we can save the results and let people come back to it, but i can see how that’s a bit of a blocker upfront

we did originally have it later in the flow, perhaps we need to revisit that

 

[fisicx]

Asking me so signup before I do anything makes it look like you just want to harvest my details in exchange for a free tool that might or might not be of any use.

Why would I need to save anything? Once I have the valuation I’ll never need to visit the site again.

Note that reviews are only permitted for business members.

 

[henryd]

Asking me so signup before I do anything makes it look like you just want to harvest my details in exchange for a free tool that might or might not be of any use.

Why would I need to save anything? Once I have the valuation I’ll never need to visit the site again.

Note that reviews are only permitted for business members.

Asking me so signup before I do anything makes it look like you just want to harvest my details in exchange for a free tool that might or might not be of any use.

Why would I need to save anything? Once I have the valuation I’ll never need to visit the site again.

Note that reviews are only permitted for business members.

the idea isnt just a one off valuation, it’s something that updates as the business changes

so if you improve things over time (reduce owner dependency, improve margins, diversify customers etc) the valuation moves with it

we’re also starting to layer in things like suggested actions and being able to track how those impact the number over time

so saving it is more about being able to come back to it and see progress, rather than just a single snapshot

 

[fisicx]

That’s how you want it to be used. That’s not how business owners will want to use.

The only time they need a valuation is if they are thinking about selling. And any value you provide will be nowhere need what the business actually sells for. You might just a well make a number up.

 

[henryd]

That’s how you want it to be used. That’s not how business owners will want to use.

The only time they need a valuation is if they are thinking about selling. And any value you provide will be nowhere need what the business actually sells for. You might just a well make a number up.

respectfully disagree. Like owning a home, people dont just care about the house valuation the moment they sell it, they want to improve and increase it constantly, and we've seen the same behavior with our first few 100 business owner users.

 

[Mark T Jones]

I think the problem you will have with getting acceptance is slightly different from what has been outlined.

Most business owners dont really want to know the value of their business, they want to know a nice, juicy figure with good luck, a following wind and a big allowance for 'potential' 'reputation' and other esoteric nonsense.

Pitch in with a realistic number and they will quickly move on.

Pitch it to flatter their ego, then you will be called out when they get a meaningful professional valuation.

I'm not sure how you aim to monetise this, but i feel in most cases it will be single-use tool.

 

[henryd]

I think the problem you will have with getting acceptance is slightly different from what has been outlined.

Most business owners dont really want to know the value of their business, they want to know a nice, juicy figure with good luck, a following wind and a big allowance for 'potential' 'reputation' and other esoteric nonsense.

Pitch in with a realistic number and they will quickly move on.

Pitch it to flatter their ego, then you will be called out when they get a meaningful professional valuation.

I'm not sure how you aim to monetise this, but i feel in most cases it will be single-use tool.

you’ve hit on a few real issues here

a lot of brokers give pretty inflated valuations upfront to win the business, which feels great as an owner, but then they spend the next few months trying to bring expectations back down and no one’s that happy

what we’re trying to do with handover is give a more grounded valuation, but also show clearly what goes into it and why it is what it is

a lot of our early users have actually come from going through that broker process and like the more open / transparent approach

on monetisation, we dont plan to charge for this tool, it’ll stay free

the goal longer term is to build useful tools for owners and then a marketplace to buy and sell businesses

marketplaces are hard to start though, so this is our way of creating value upfront and building from there

 

[fisicx]

what we’re trying to do with handover is give a more grounded valuation, but also show clearly what goes into it and why it is what it is

If you can do this without having to sign up you will get far more traction. Provide a really good service then add in the sign up to see comparable businesses.

I built a wordpress plugin for a client that did some clever financial calculations. They had a sign up form to start the process. When we moved the sign up to the end of the process conversion massively increased. It went from a couple each day to hundreds.

 

[henryd]

If you can do this without having to sign up you will get far more traction. Provide a really good service then add in the sign up to see comparable businesses.

I built a wordpress plugin for a client that did some clever financial calculations. They had a sign up form to start the process. When we moved the sign up to the end of the process conversion massively increased. It went from a couple each day to hundreds.

yer valid, we might move it back then if its causing ppl to not use the tool. the tool (in my opinion) is very nicely put together and I've been designing and building software for 15 years so be a shame to kill conversion bc of it.

 

[fisicx]

Or make it so I can see a basic valuation but need to sign up to see the breakdown and areas for improvement.

And consider a premium service. Free can have negative aspects as businesses may wonder why it's free (ie: is it just a marketing exercise). But is you have a £149 premium business valuation with a full report by a chartered accountant you can actually increase conversions.

 

[Paul Kelly ICHYB]

"Calculating a value of a business is very near impossible" is kind of the core problem we’re trying to address.

and you will always get it wrong!

It will be too low, so the business will not like the result or it will be too high, so businesses will be disappointed when they do no acheive anywhere near what you indicate.

If the latter, it can also enforce a common issue of where businesses overvalue themselves to the point where they cannot sell their business and blame everyone else.

Where this would be a good tool is as a funnel for business agents....

 

[henryd]

and you will always get it wrong!

It will be too low, so the business will not like the result or it will be too high, so businesses will be disappointed when they do no acheive anywhere near what you indicate.

If the latter, it can also enforce a common issue of where businesses overvalue themselves to the point where they cannot sell their business and blame everyone else.

Where this would be a good tool is as a funnel for business agents....

agreed its not going to be perfect

the model uses a mix of:

• industry multiples for different types of businesses (based on real data + input from a couple of accountants that do this day to day)
• business assets
• owner dependency

so in some cases it can actually highlight why a business might be worth less than expected, for example if it’s heavily reliant on the owner

in those situations it at least gives the owner something actionable, either improve that over time or structure a sale differently (seller note, earn out etc)

of course it’s not going to tell you exactly what a business will sell for, that’s always a forward looking negotiation

but we can look at what has actually sold historically and apply some logic there, which i think is still useful for an owner to understand where they roughly stand

if you were using something like this, what would you actually want to see in the output for it to be useful?

 

[Paul Kelly ICHYB]

if you were using something like this, what would you actually want to see in the output for it to be useful?

Having sold a couple of businesses, I wouldn't use a tool like this. I understood my market, my business and need of the buyer and was happy with the results.

Remember, big business/PLC's is a more 'structured' world, whereas SME's tend to be a bit more woolly, clouded and confusing.

 

[StrategyDoctor]

Agree with a lot of the sentiment from the other replies (@Paul Kelly ICHYB @fisicx @Gecko001) in particular that valuing a business is more an 'art' than a 'science' . There are a lot of variables and buyer v seller interpretation. Ultimately it does comes down to what someone is willing to pay on the day (and there’s always an element of emotion in that decision).

What I would add is there are already quite a few tools out there doing similar things (valuation ranges plus suggested actions to “increase value”, etc) and so I assume there is clearly interest from business owners.

So the key question becomes: how is your product genuinely different?

Is it the quality of the inputs, the transparency of the assumptions, the ability to track improvements over time, or something else?

Because if it’s just another valuation calculator, I guess you’ll struggle, but if it helps owners actually understand and influence what drives value in a practical way, that’s where it may be of interest to some business owners. (I would add, in my experience, by the time a business owner decides he wants to sell it is often too late to introduce many of the changes within their desired timeline ).

Out of interest, what’s the one thing your tool does that others don’t?

 

[henryd]

Agree with a lot of the sentiment from the other replies (@Paul Kelly ICHYB @fisicx @Gecko001) in particular that valuing a business is more an 'art' than a 'science' . There are a lot of variables and buyer v seller interpretation. Ultimately it does comes down to what someone is willing to pay on the day (and there’s always an element of emotion in that decision).

What I would add is there are already quite a few tools out there doing similar things (valuation ranges plus suggested actions to “increase value”, etc) and so I assume there is clearly interest from business owners.

So the key question becomes: how is your product genuinely different?

Is it the quality of the inputs, the transparency of the assumptions, the ability to track improvements over time, or something else?

Because if it’s just another valuation calculator, I guess you’ll struggle, but if it helps owners actually understand and influence what drives value in a practical way, that’s where it may be of interest to some business owners. (I would add, in my experience, by the time a business owner decides he wants to sell it is often too late to introduce many of the changes within their desired timeline ).

Out of interest, what’s the one thing your tool does that others don’t?

Where we’re trying to be different is less about the number itself, and more about making it actually useful to an owner:

• Transparency over black-box outputs — we show exactly how the valuation is built up (multiples, adjustments, risks), so it’s not just “here’s your number”
• Clear drivers of value — breaking down what a buyer will like / not like (owner dependency, concentration, margins etc) in a way that’s easy to act on
• Progress over time — letting owners track how changes in the business impact value, rather than it being a one-off snapshot

We’re also experimenting with removing as much friction as possible (no signup / WhatsApp flow etc) to get more people using it early.

Would be great to get your take after trying it — particularly whether the “why” behind the number is actually useful or still feels too abstract??

my dm's are open for any and all feedback

 

[Jprandss]

I tried it.

The signup thing is a definite barrier and I wouldn’t have otherwise continued. The ‘5 min sales call’ email feels a bit scammy to me and puts me off.
Personally the more something feels like sales, and I will run away.

The actual valuation was quite slow to load, but gave me around the valuation that I would have guessed.
It felt a bit like chatting about my business to a surfer dude ‘wow, great, super cool’ which was odd.

I don’t know whether I would continue to use it. I started to think ‘who exactly am I giving this financial detail about my business to?’

I am not looking to sell in the short term so I don’t feel I have much use for it. The main advise on improving the sales figure are things I already know about and am addressing. I don’t really need to keep coming back to get an updated opinion from ai. Or I could just go to a standard ai for that.

Hope there’s useful feedback in that. It does look slick.

I am looking to buy businesses and have sold one, with another up for sale. I’d probably rather just a nicer and slightly more user friendly version of the broker sites already available, than going through this route to launch your version.

 

[henryd]

I tried it.

The signup thing is a definite barrier and I wouldn’t have otherwise continued. The ‘5 min sales call’ email feels a bit scammy to me and puts me off.
Personally the more something feels like sales, and I will run away.

The actual valuation was quite slow to load, but gave me around the valuation that I would have guessed.
It felt a bit like chatting about my business to a surfer dude ‘wow, great, super cool’ which was odd.

I don’t know whether I would continue to use it. I started to think ‘who exactly am I giving this financial detail about my business to?’

I am not looking to sell in the short term so I don’t feel I have much use for it. The main advise on improving the sales figure are things I already know about and am addressing. I don’t really need to keep coming back to get an updated opinion from ai. Or I could just go to a standard ai for that.

Hope there’s useful feedback in that. It does look slick.

I am looking to buy businesses and have sold one, with another up for sale. I’d probably rather just a nicer and slightly more user friendly version of the broker sites already available, than going through this route to launch your version.

firstly very much appreciate you taking the time to look at it, means a lot.

the feedback is very useful and think there are things we can implement right away (surfer dude convo style for example) and some wider points about long term usefulness we need to think on (I agree its an issue btw).

thanks again

 

[fisicx]

This thread is in danger of becoming a website review. Please do not ask for or provide any feedback on the website.

 

[LPB 123]

respectfully disagree. Like owning a home, people dont just care about the house valuation the moment they sell it, they want to improve and increase it constantly, and we've seen the same behavior with our first few 100 business owner users.

When buying / selling a house a couple of years ago the whole process was on an online portal. You could see where you were in the process, what documents you needed to upload, surveys, deeds, track solicitor emails etc. You knew exactly what was happening and didn't need to chase solicitors to find out what was happening next and what they were waiting on.

Is there a use of a similar portal for a business sale? You could be the portal where everything was stored between the parties for the "handover".

NDA's, proof of funds, financial statements, assets, deeds, debts, IP etc. Accountants, brokers, solicitors and buyers/sellers could all have access and can see a log of everything that has been done, discussed, negotiated and everything that still needs to be done.

(I have never bought or sold a business so no idea if this is something that is needed or would add value to either party).

 

[henryd]

When buying / selling a house a couple of years ago the whole process was on an online portal. You could see where you were in the process, what documents you needed to upload, surveys, deeds, track solicitor emails etc. You knew exactly what was happening and didn't need to chase solicitors to find out what was happening next and what they were waiting on.

Is there a use of a similar portal for a business sale? You could be the portal where everything was stored between the parties for the "handover".

NDA's, proof of funds, financial statements, assets, deeds, debts, IP etc. Accountants, brokers, solicitors and buyers/sellers could all have access and can see a log of everything that has been done, discussed, negotiated and everything that still needs to be done.

(I have never bought or sold a business so no idea if this is something that is needed or would add value to either party).

this is actually very close to where we think things could go longer term.

The valuation is more the starting point, but the messy part is everything that happens after that, and today it’s pretty fragmented across email, docs, solicitors etc.

A single place to manage the whole process (documents, parties, progress) is the gap we're going after.

 

[fisicx]

A single place to manage the whole process (documents, parties, progress) is the gap we're going after.

Have you spoken to any solicitors about this? Getting them to use your portal may be a bit of a struggle. Even getting both seller and buyer to login and use the portal may be difficult.

 

[henryd]

Have you spoken to any solicitors about this? Getting them to use your portal may be a bit of a struggle. Even getting both seller and buyer to login and use the portal may be difficult.

If a buyer and seller have matched on Handover, I think they’ll both be pretty happy to use it to complete the deal, otherwise it simply won’t go through.

You’re right on the solicitors though. From speaking to a lot of business owners over the past few months, the professional services side of the sale is often where things dont go as smoothly as they should. accountants or solicitors not really understanding how to structure deals properly, which ends up costing buyers/owners.

One thing we’re thinking about is working with a small group of specialist advisers who focus on business sales and are familiar with Handover, rather than trying to force adoption across everyone from day one.

 

[fisicx]

If a buyer and seller have matched on Handover, I think they’ll both be pretty happy to use it to complete the deal, otherwise it simply won’t go through.

That's going to be the biggest hurdle. 1. Making either party aware the service exists and 2. Convincing them and their legal representative and advisors to use the service.

I'm not sure you aren't creating a solution for a problem that doesn't exist. The two times I've sold a business it all went very smoothly. Lots of back and forth but once the terms were agreed, documents were signed and money changed hands. The solicitor used docusign so really simple to complete.

My mate sold his multi-million business and it took 18 months with umpteen false starts and long conversations with co-directors and buyers. Again though, the process wasn't complicated and they used the solicitors online document control portal. He thinks it was called Clio.

 

[henryd]

That's going to be the biggest hurdle. 1. Making either party aware the service exists and 2. Convincing them and their legal representative and advisors to use the service.

I'm not sure you aren't creating a solution for a problem that doesn't exist. The two times I've sold a business it all went very smoothly. Lots of back and forth but once the terms were agreed, documents were signed and money changed hands. The solicitor used docusign so really simple to complete.

My mate sold his multi-million business and it took 18 months with umpteen false starts and long conversations with co-directors and buyers. Again though, the process wasn't complicated and they used the solicitors online document control portal. He thinks it was called Clio.

I think that’s fair if you’ve had relatively smooth deals, but from what we’ve seen that’s not the norm.

The market today is opaque and fragmented. You’ve got listings spread across different sites, brokers all running their own processes, and very little transparency.

For most owners, it’s not a clean “docs signed, money moves” experience, it’s a lot of back and forth, unclear expectations, and often a mismatch between what they think the business is worth and what the market will actually pay.

What we’re trying to do with Handover is bring a bit more clarity and transparency to that whole process, from understanding value through to actually completing the deal.

Out of interest in your smoother deals. how did you actually find the buyer in the first place?

 

[fisicx]

I think that’s fair if you’ve had relatively smooth deals, but from what we’ve seen that’s not the norm.

Maybe not, but as each deal and sale is unique there is unlikely to be a standard process. The issues tend to arise when the seller is less than truthful about the business and expectations.

Out neighbour has just experienced this, the seller was obfuscating details about TUPE and trying to hide expiring contracts. Your platform won't fix these sort of issues.

Out of interest in your smoother deals. how did you actually find the buyer in the first place?

Advertised on the product itself that the business was for sale. Buyer was in the USA and docusign was use to seal the deal. Money was already in escrow and released within hours.

It was all straightforwards because the solicitor knew what they were doing. Many sellers and buyers try to do things on the cheap which is another reason what is goes a bit Pete Tong.

Nothing wrong with your plans for a tool to help buy and sell businesses. But you will almost certainly need to integrate with existing platforms to get any traction. Solicitors aren't going to switch to a new DMS for the occasional business sale that comes from your handover tool.

 

[henryd]

But you will almost certainly need to integrate with existing platforms to get any traction. Solicitors aren't going to switch to a new DMS for the occasional business sale that comes from your handover tool.

100% agree, as we build I’m sure we’ll run into plenty of scaling challenges that will seem obvious in hindsight.

Right now the focus is simply on building genuinely useful tools for buyers and sellers, and then converting that into real transactions.

On your earlier point around signup friction, we’re actually rebuilding the flow to run inside WhatsApp, so there’s no signup required at all. Do you think that would lower the barrier to trying something like this?

 

[Banksbroo]

Having started the business sale process with a professional broker (ie. not a we-buy-any-business type operation) I was struck by the detail of the scoping and discovery stage. Basic financials we're easy to answer. But more probing questions over things like customer longevity, order frequency, process documentation, formal contracts, credit control procedures, supplier analysis, risk analysis, stock control etc opened up a very useful insight into what could be improved, documented or refined to increase company value. I have a feeling that this background stuff, say as an efficiency / optimisation dashboard would have more value to a company than a "how much is it worth?" question. Improving these scores would give a company reason to use it as a regular tool. The market would be businesses with a growth and exit strategy with the exit years down the line, but using your analysis to help guide / monitor company progress towards an optimum sale proposition.

 

[fisicx]

we’re actually rebuilding the flow to run inside WhatsApp….

Nope. There might be the odd micro business happy to use WhatsApp but any serious buyer/seller will likely run a mile.

 

[henryd]

Having started the business sale process with a professional broker (ie. not a we-buy-any-business type operation) I was struck by the detail of the scoping and discovery stage. Basic financials we're easy to answer. But more probing questions over things like customer longevity, order frequency, process documentation, formal contracts, credit control procedures, supplier analysis, risk analysis, stock control etc opened up a very useful insight into what could be improved, documented or refined to increase company value. I have a feeling that this background stuff, say as an efficiency / optimisation dashboard would have more value to a company than a "how much is it worth?" question. Improving these scores would give a company reason to use it as a regular tool. The market would be businesses with a growth and exit strategy with the exit years down the line, but using your analysis to help guide / monitor company progress towards an optimum sale proposition.

That’s reassuring to hear, this is exactly the direction we’re thinking.

Beyond the quick valuation, we’re building more in-depth flows that help owners understand how sellable their business actually is, and what they need to improve to increase that over time. Some of those flows already exist inside the app today and have had businesses use them.