Cactus Agency Valuation Tool
Our free Agency Valuation Tool will give you a quick indicative valuation for your business.
Thank you so much for taking the time to use our automated valuation tool. First and foremost it’s important for us to point out that this tool is designed to be a guide and shouldn’t be used in place of a formal valuation for the business.
Think of it like using the Zoopla online property valuation tool. It will give you a range, but if you were going to sell your property you would instruct an agent formally to get an accurate valuation.
Before you begin, we recommend reading the commonly asked questions below.
FAQs
How long will it take to complete the form?
Assuming you have all of the information to hand that you need to complete the questionnaire (more on that later) it should take no more than 15 minutes to complete.
How long will it take Cactus to send over the results to me?
We aim to complete the valuation within two working days for you. The reason that it isn’t instantaneous is that one of our consultants will manually sense check the entries you have made during the completion of the questionnaire. During busy periods it may take slightly longer for the results to be shared. In some cases, we may contact you to double-check your entries if we feel that they aren’t quite in line with our expectations or if we need to confirm something with you.
What information will I need to complete the questionnaire?
Most of the information will come from your full year end accounts, that would have been sent to you from your accountants.
Last 2 years full signed accounts
You will need the full version which includes the detailed Profit and Loss account on the last 2 pages.
We ask for 3 years of Operating Profit (more on this later) in the questionnaire. You will be able to determine that number from the last 2 years’ accounts, as there is a comparative column which always shows the prior year’s number.
Client concentration
One of the questions relates to client concentration, which means you will need to know how much of your income comes from your biggest clients. EG you have £1m in revenue (more on this later) and £300k comes from your biggest client, the client concentration for your largest client is 30%.
If you use Xero, as many of you do, there is a report that can be run showing the total annual spend from all clients. Use this as a starting point. If you don’t have this we’re sure most of you will know approximately how much your biggest client spends in percentage terms.
Directors pay and benefits
In our experience, most of you will be paying yourself a small salary, perhaps some pension contributions and dividends.
When we ask for directors’ pay and benefits in the questionnaire we need to know the numbers from your detailed profit and loss account, not the dividend number.
Within the detailed profit and loss account, there will be lines for ‘Directors Salary’ and ‘Directors Pension Contributions’.
Director salary is fairly obvious, but for benefits, you may have to add together, pension contributions, life cover, health insurance, cost of company cars etc, to get the figure you need.
Directors’ market rate salary
As explained above, most of you will be taking a mixture of salary and dividends as your remuneration package from the Agency.
When we value the business we need to adjust this for your market rate salary. EG you take £10,000 per annum in salary, £20,000 in pension contributions and £70,000 in dividends totalling £100,000 per annum. This is not unreasonable for an owner-managed business.
However, the salary of the role needed to replace you could be £120,000. This is your market rate salary and in some cases this may be significantly more or less than your current earnings.
If you don’t know this number then that's ok. We can probably make a reasonable assumption on your behalf.
Do you have a Senior Leadership Team?
We would define senior leadership as a group of people who can genuinely run the business in your absence. It probably consists of the following roles:
Finance Manager/Director
Marketing Manager/Director
Client Service Director
Delivery Director (Senior Project Management)
Talent & Culture Manager/Director
Having these people in place adds value to the business. But we understand that the Agency needs to be a certain size and above to be able to afford these salaries.
Where do I find the operating profit number in my accounts?
The Operating Profit number will be on the face of the main Profit and Loss account a few pages into the accounts.
In the example below, the operating profit is £623,286 for the current year and £334,916 for the prior year.
What do you describe as revenue when you are calculating your client concentration?
Some of you may have significant pass through costs, or cost of sales. Taking the example we used earlier, it might be that within that £300k from the client, £250k was media spend. So in this example, we would say that the fee income or revenue is 5% of the Agency’s total, not 30% as the media spend is not the Agency’s money.
When calculating client concentration, please ignore significant passthrough costs in relation to the account.
What if I get stuck answering something?
Complete the questionnaire as best you can and make a note in the comments box at the end of the points you need to clarify and we’ll do our best to help. Please bear with us though! This is a free tool and not a formal valuation process as we’ve explained.
Will my data be kept confidential?
The data you share through the Valuation Tool will be stored securely and kept confidential. Cactus will never disclose the information shared to any other parties and will not use any of the information in any way except to provide you with an indicative valuation for your business.
