There’s no magic formula, but here’s a simple benchmark to use as a starting point when looking to acquire a business under £2m PBT:
1x-4x PBT
+ Assets
– Liabilities
+ Free cash
Factors that increase multiples:
• Solid pipeline of future work
• Low customer concentration
• Clean, consistent financial reporting
• Documented systems and processes
• Strong, stable second-tier management
• Recurring revenue or long-term contracts
• Minimal owner involvement day-to-day
View the original article and our Inspiration here
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