A Plain-English Guide for IT & Telecoms Business Owners
If you’re an IT or telecoms business owner thinking about selling — or just curious about where you stand — one of the first questions you’ll ask is:
“How much is my business worth?”
It’s a fair question. You’ve spent years building something valuable. You want to know what all that hard work could translate to if you decided to sell.
But business valuation isn’t as simple as punching numbers into a calculator. And in specialist sectors like IT and telecoms, there are unique factors that make a difference.
In this post, we’ll walk you through how valuations typically work, what influences the value of your business, and what you can do to improve your position — whether you’re looking to sell now or just planning ahead.
First, the Short Answer:
Your business is worth what someone is willing to pay for it.
But the longer answer depends on:
- What kind of business you run
- How well it’s performing financially
- How attractive it is to a buyer
- What future growth it offers
So let’s break it down.
1. Common Valuation Methods
Most IT and telecoms businesses are valued using a multiple of profit — typically:
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation)
- Seller’s Discretionary Earnings (SDE) if you’re an owner-managed business
The “multiple” you apply to that figure depends on risk, scale, and growth potential. For example:
- A small, owner-dependent business might sell for 2–3x profit
- A larger business with recurring revenue and systems in place might sell for 4–6x profit — sometimes more
It’s not a fixed formula, but rather a range. Your unique characteristics help determine where you sit on that scale.
2. What Increases the Value of Your Business?
Buyers aren’t just looking at what you earn now — they’re thinking about future return on investment. So businesses that are easier to run, scalable, or have predictable revenue streams tend to be worth more.
Here’s what increases value:
- Recurring Revenue – Long-term contracts or subscriptions
- Strong Customer Base – Especially B2B clients with low churn
- Clean Financials – Well-kept records and accurate accounts
- Operational Independence – Business doesn’t rely solely on you
- Specialist Niche – Services others can’t easily replicate
- Growth Potential – Room to scale or expand offerings
If you’re ticking several of these boxes, your multiple is likely to be on the higher side.
3. What Can Reduce Value?
On the flip side, here are some common things that reduce a business’s value:
- Heavy reliance on the owner
- Inconsistent or one-off revenue
- Poor record keeping or messy finances
- High customer concentration (e.g. 1–2 clients making up most of your income)
- Outdated systems or lack of documentation
The good news? Many of these can be fixed or improved — especially if you start planning early.
4. What Buyers Really Want
Buyers want reassurance that:
- The business can keep running smoothly without you
- They’ll get a return on their investment
- There’s room to grow the business further
If you can demonstrate that — with data, not just optimism — you’ll be in a much stronger position to command a higher price.
5. What About the Market?
Wider market trends also play a role. Right now, the IT and telecoms sector is attractive to buyers — especially those looking to grow through acquisition. That means:
- There may be more competition to buy businesses like yours
- Buyers are often willing to pay more for the right fit
- Now might be a good time to explore your options — even if you’re not ready to sell tomorrow
So… How Much Is Your Business Worth?
There’s no one-size-fits-all answer — but there is a process. The best way to find out is to speak with someone who understands the sector and the type of business you’ve built.
A proper valuation will look beyond just the numbers. It’ll take into account the full picture: operations, customers, contracts, assets, risk, and reward.
Thinking About Selling?
We help owners of IT and telecoms businesses understand their value, explore their options, and exit on their terms.
Let’s have a confidential, no-obligation chat.
Whether you’re looking to sell now or just planning for the future, it pays to know where you stand.