Business Value & Exit Snapshot.

Buyers start from what the business earns for an owner who is not you. Your own pay is reset to a normal salary for the work you do, and genuinely one-off costs come out. The result is what buyers call EBITDA: profit before interest, tax, and the write-down of equipment, vehicles and other assets.

Many buyers price a business as a multiple of that figure, meaning a number of times the yearly profit, so every adjustment needs a reason and evidence behind it. An adjustment a buyer cannot follow tends to come off the profit, and then off the price several times over.

Simon gives an indicative range using the methods buyers typically use, with the assumptions written down so you can see what would move it up or down.

It is a planning figure for a possible sale. It is not a formal valuation for tax, court or lending purposes, and it is not a promise of price: the market, the deal terms and a buyer's checks decide that. What it gives you is a starting point to measure progress against, and an honest sense of whether the gap between today's value and your hopes is worth closing first.

HVAC buyers pay for income they can count on. We look at how much of your turnover comes from planned maintenance contracts, how much from repeat callouts without a contract, and how much from one-off installations.

Written contracts with renewal dates and prices carry more weight than handshake arrangements, and a buyer will ask how many renew each year. A buyer will also ask for a register of the agreements, with the customer, the equipment, the annual value and the renewal date, because a missing contract schedule is the thing that most often holds up an HVAC sale.

Next, how much rests on one or two customers. A main contractor or a single landlord who supplies a large share of the work is a risk a buyer will price, especially if that relationship sits with you personally.

We look at the spread of your customers by value. A buyer will go further and ask whether the larger accounts are on written terms, and who in the business holds the day-to-day contact. A concentrated customer list is not a reason to give up on a sale, but it is a reason to know the position before a buyer points it out.

We look at how much of the work, the customers and the know-how sits with you or with one or two key people. In an HVAC business that often means the owner prices every job, holds the commercial relationships and acts as the Gas Safe responsible person.

A buyer then sees that they are buying your time, and your time is leaving. That risk tends to show up in the price, or in how much of the price is held back until later. The Snapshot names where the dependence sits, so you can decide whether to work on it before going further.

From what you tell us, we form a view on whether your records would satisfy a buyer and which risks are most likely to come up. In this trade that includes whether the company's F-Gas certification and any MCS certification are current, how your engineers' qualifications are recorded, and whether the vans are owned, leased or on finance.

The Snapshot works from your figures and your answers. It does not go through your contracts or your staff in detail: that is what the Full Value & Sale Readiness Review is for.

Ben Davies, our Financial Preparation Specialist, checks the figures behind Simon's view. He looks at whether your year-end accounts and your monthly figures tell the same story, whether there is evidence for the one-off costs, and what it would cost to replace the work you do yourself.

If your figures need more work than a Snapshot can cover, he will tell you, and the Finance & Information Readiness Review is where that work is done.

In an HVAC business, the first thing most buyers want to see is the split between service and maintenance income and design and install work, because they value the two very differently. A strong year of installations can lift turnover without lifting what a buyer will pay.

If your accounts do not yet show the two apart, putting that right is part of the Finance & Information Readiness Review, which looks at sales, margin and profit by type of work.