Posted: 08 / 07 / 2026

Accountants are hugely important to any business. A good one keeps reporting accurate, spots issues early, and helps owners understand performance properly. But business owners sometimes assume that an accountant is automatically the right person to advise on a business transaction and the expected transaction value.

In theory, selling a business is a very different practice. Buyers are not just reviewing historical accounts, they’re trying to decide how much risk they’re taking on, how believable future growth is, and whether the business still performs well once the exiting shareholders steps back. 

The challenge in any transaction is positioning the risk, strategic fit, future growth potential, negotiation dynamics, and deal structure in the correct way and these are the areas that transition this process away from accountants and towards strategic corporate finance advisors. 

WHY ACCOUNTING VALUATIONS AND TRANSACTION VALUATIONS DIFFER

Accountants tend to value businesses based on historical performance and technical accuracy. Corporate financiers look beyond the numbers, incorporating strategic, commercial, and market considerations to determine the most appropriate valuation.

Transaction values rarely follow a neat formula, and there is no one size fits all approach.

Buyers ask broader questions:

  • How scalable is the business?
  • Are the accounting principles and correct costs passing through the business?
  • How credible are the forecasts?
  • How dependent is the company on the business owner or key customers?
  • Are there strategic synergies?
  • What risks emerge during due diligence?

Those issues materially affect how competitive the buyer appetite is and subsequently, what buyers are willing to pay. 

An M&A adviser looks at valuation through a transaction lens. That means understanding not only what the business is worth internally, but how it will be perceived by the market.

CONSIDERING BUYER PSYCHOLOGY

One of the biggest differences between accounting and Corporate Finance advisory work is understanding buyer behaviour.

Transactions are negotiations, and negotiations are heavily influenced by confidence. Buyers want to feel comfortable that the business can deliver, especially once ownership changes hands.

Experienced advisers understand how buyers react to:

  • Weak forecasting
  • Customer concentration
  • Founder dependency
  • Management gaps
  • Inconsistent reporting
  • Operational risk

They also understand how to position strengths effectively without overstating the business.

THERE’S MORE TO THE DEAL THAN THE HEADLINE FIGURES

A headline valuation is only part of the picture.

A common mistake business owners and accountants make is obsessing over the headline valuation while barely looking at the structure underneath it. On paper, one offer might look significantly better than another. But if a large percentage of that value is tied up in aggressive earn-out targets or deferred payments, the reality can look very different later on.

A slightly lower offer with cleaner terms is often the better deal. Corporate Finance advisers evaluate:

  • Cash at completion
  • Deferred consideration
  • Earn-out mechanisms
  • Working capital adjustments
  • Risk allocation
  • Negotiation leverage

That broader perspective matters because transaction outcomes are rarely determined by valuation alone.

WHY PREPARATION AFFECTS VALUATION

Strong valuations are usually built long before a sale process begins.

Experienced advisers help founders identify weaknesses early, such as poor reporting systems, weak management depth, over-reliance on key customers, forecasting issues, and operational gaps. Addressing these areas before entering a transaction process can materially improve both valuation and deal certainty.

One thing we consistently see is that businesses rarely achieve significantly higher valuations simply because they produce stronger short-term numbers immediately before a sale. Buyers are far more focused on the quality and sustainability of earnings over the long term, rather than short-term performance spikes that may not be repeatable after completion.

WHY FOUNDERS BENEFIT FROM TRANSACTION EXPERIENCE

Most founders only sell a business once, whereas M&A advisers work on transactions repeatedly across different sectors, buyer types, and market conditions.

That experience becomes particularly valuable during negotiations, due diligence, and buyer engagement, where small mistakes can materially affect both valuation and deal certainty.

Experienced advisers help founders avoid common issues such as entering the market too early, overpricing the business, underestimating buyer concerns, failing to prepare management teams properly, or accepting weak deal structures that look attractive on paper but create problems later on.

Ultimately, valuation is not just an accounting exercise. In a live transaction, it becomes part of a much wider strategic process involving positioning, negotiation, risk management, buyer confidence, and deal execution.

FAQs

Can an accountant value my business?

Yes, but accounting valuations and transaction valuations are often different. M&A advisers focus more heavily on buyer behaviour, risk, and deal dynamics.

Why does buyer perception matter in valuation?

Because buyers assess future earnings potential and risk, not just historical financial performance.

What does an M&A adviser do differently?

They help position the business for sale, assess market appetite, manage negotiations, and evaluate deal structure alongside valuation.

Are higher valuations always better?

Not necessarily. Deal structure, earn-outs, and deferred payments can significantly affect the real outcome.

When should founders engage an adviser?

Ideally well before a transaction process begins so operational and valuation risks can be addressed early.

Who can value my business?

A business valuation performed by a M&A (Mergers and Acquisitions) or Corporate Finance professional will provide strong evidence of a realistic valuation of your business. These professionals are involved in advising clients on buying and selling businesses, so understand the way a buyer will perceive value.

Sedulo Deal Advisory is experienced in guiding our clients through the full lifecycle of a transaction process. From an initial meeting, we endeavour to fully understand your requirements and expectations to ensure we can provide world-class service throughout the transaction.

We have experience in achieving premium valuations for the companies we have acted for by nurturing them in preparation of a sale and generating maximum interest from potential bidders.

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AUTHOR BIO

Zarak Zaman (pictured) is a Corporate Finance Manager at Sedulo Deal Advisory, specialising in strategic advisory, transaction support and business valuations. He advises founders and shareholders on transaction readiness, valuation strategy, and deal execution.