Valuers usually qualify their valuations by stating the circumstances under which the valuation is being undertaken. For example, is the valuation of the business as a ‘going concern’, or for a close down, or for the sale of assets under duress (i.e. in a ‘fire sale’)? These circumstances can dramatically affect value as they could determine the presence or otherwise of goodwill value and the price received for individual assets.

For example, the value of fixed assets can be greatly reduced in a ‘fire sale’ when they are moved from their original premises and sold individually, rather than all together as a complete operating unit. In most cases of exit planning the owners of a business will be considering value as a going concern, but it is useful to be aware of the impact an exit through a close down (particularly a liquidation) could have on your business’s value.