What is your company’s fair financial value?

A business is only worth what someone will pay for it, and therefore the market will ultimately be the most accurate reflection of the value of your company.

The BEST way to determine your company’s worth is to go through our Estimate of Value process. This process is a proven method and compares the value of your IT services firm to industry data sources, specific to the IT industry.

Through our Estimate of Value process, you receive a score. Your score is then used to measure soft risks and therefore where you will likely land on the range of value typically found among similar businesses in your industry.

While we always show an estimate of value, the reality is that multiples pivot around higher-scoring businesses. These types of businesses command strategic prices that go significantly higher than financial buyer prices, while lower scores may indicate that the business is not sellable beyond its liquidation value.

How is your IT services firm valued?

A business is only worth what someone will pay for it, and therefore the market will ultimately be the most accurate reflection of the value of your company.

The estimate of value in your report is based on information from your questionnaire. There are eight attributes that drive your value.


Financial Performance

Specifically, revenue size along with past and expected profitability.

Growth Potential

Acquirers typically pay the most for businesses with the potential to grow.

Switzerland Structure

A business’ sellability requires the business not be overly reliant on any one customer.

Valuation Teeter Totter

This reflects the impact your cash flow, gross margin and profitability have on the value of your company.

Hierarchy of Recurring Revenue

Extent to which an acquirer can see where your sales will come from in the future.

Monopoly Control

Warren Buffett is famous for investing in companies with a protective “moat” around them, making it difficult for its competitors to compete.

Customer Satisfaction

Measures both the extent to which your customers are satisfied and your ability to assess customer satisfaction, which is very important to acquirers.

Hub & Spoke

Measures the extent to which your business can thrive without you.

The higher your organization’s maturity in the eight elements that drive value, which we assess in our Estimate of Value, the less risk for your acquirer, leading to a higher valuation for your company.

By contrast, a strategic buyer develops an offer by estimating the value of your company in the hands of the buyer. The math a strategic acquirer does starts with imaginings of what would happen if your company were grafted onto its platform. Companies make strategic acquisitions for many reasons, but these are the three most important ones:


Discounted Cash Flow Method (DCF)

In this method, the acquirer “buys” future income at its present-day value discounted for risk in the company as well as the probability of achieving the forecast. The discount rate is influenced by internal factors (e.g., dependency on the owner) and external market factors (overall industry stability/growth, interest rates).

Capitalization of Earnings

In this method, the acquirer determines the present value of the Company’s current economic benefit stream growing at a fixed rate based on its historical performance and expected rate of return which is built upon the current cost of capital.

Market Transactions

We look at reported transactions that have occurred in the industry transaction values diverge from valuations because the specific terms of a transaction impact the transaction value.

Buyers will typically value not only next year’s profit, but all expected profits in the foreseeable future. For every year into the future that buyers must wait to get their profits, they will determine what the present-day value is of those future profits.

I know this may sound confusing, but we want your IT services firm to get an estimate that leverages the math behind your multiple.

By the time we’re done, you’ll know the fair market value of your company so you can determine what your next steps are.

Are you ready to sell?

Want to increase the value of your business?

Get your Value builder report by completing the form below.

Here’s what one of your peers has to say about their estimate of value.

“Working with Reed and Heidi was a comfortable and easy process. There is a lot of information that needs to be gathered to do an accurate assessment of a technology business and they made it manageable and painless. The report we received about our business at the end of the process was priceless. Everything was broken down, easy to read and easy to understand.”

Michelle Padilla
CFO & COO, Telcion Communications Group

Are you ready to determine your value?

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