Sep 28, 2026 · 1 hr 8 min · 12 segments
How much is your business really worth — and would a buyer actually pay the number you have in your head?In this episode of the Dig In Deep Podcast, Liam Moore puts the questions to Mark Kennedy as…
Mark KennedyGuestLiam MooreHostNo, no, Mark, so I was going to say, so when we're bringing it back into the plant and machinery then and plant hire, you know, if I was sitting there as a business owner and I had a million pounds worth of actual plant and equipment, does that mean I'm just sticking a million pounds of what I think it is onto the sheets there? Would that be a right analogy or not for the valuation? No, not
If you had a million pounds worth of machinery... that machinery is required to generate the EBIT you've just valued.
Simply adding another million can effectively double the count of its contribution.
But surplus asset, excess cash or property not required for normal operations can be different.
Asset heavy businesses may also need a different valuation approach altogether.
you go in there and the asset register is probably one of the worst things that you'll see in some businesses there's plant there that they don't know they've got there's plant there that they've written down um people write things down completely different you think there'd be a standardization so some companies listening they'd hear that they do like a what they call a reducing balance so they start 100 pound and every year they reduce that by 20 say for example so there's 100 the next year straight away that's a simple maths it's eight it's 80 and then they're taking 20% the following year off the 80 so it's like reducing in a curve and a lot of people do that and that kind of sets a kind of a valuation in the old days that would have been the valuation of your equipment but now with auctions that are so prominent and data so much available the actual price of that asset is easy to find so not many people are valuing their equipment based on that That curve, they are on the books, but when it comes to it, they know it's slightly different.
If you're one of those does a reducing balance new kick is a killer on your P&L.
You're paying the depreciation heavily at the beginning whereas the straight line is an equal amount every year.
But then you've got to really have a, if you're doing a straight line, you've got to have a real disciplined sell, you know, you need to know where you're going to sell.
And some people, unfortunately, they write that plant down to zero, which is not a good look because then you've got like, you might have 100 assets at zero.
And then when, of course, when you sell, and this is the biggest thing that people, sellers don't see where buyers do, is that they might make an operating loss.
So imagine you've got like 15 eight-tonners in the yard, and you've had them for five years.
You've written them down over a straight line over five years, and they're worth zero in your books.
No, no, Mark, so I was going to say, so when we're bringing it back into the plant and machinery then and plant hire, you know, if I was sitting there as a business owner and I had a million pounds worth of actual plant and equipment, does that mean I'm just sticking a million pounds of what I think it is onto the sheets there? Would that be a right analogy or not for the valuation? No, not
If you had a million pounds worth of machinery... that machinery is required to generate the EBIT you've just valued.
Simply adding another million can effectively double the count of its contribution.
But surplus asset, excess cash or property not required for normal operations can be different.
Asset heavy businesses may also need a different valuation approach altogether.
you go in there and the asset register is probably one of the worst things that you'll see in some businesses there's plant there that they don't know they've got there's plant there that they've written down um people write things down completely different you think there'd be a standardization so some companies listening they'd hear that they do like a what they call a reducing balance so they start 100 pound and every year they reduce that by 20 say for example so there's 100 the next year straight away that's a simple maths it's eight it's 80 and then they're taking 20% the following year off the 80 so it's like reducing in a curve and a lot of people do that and that kind of sets a kind of a valuation in the old days that would have been the valuation of your equipment but now with auctions that are so prominent and data so much available the actual price of that asset is easy to find so not many people are valuing their equipment based on that That curve, they are on the books, but when it comes to it, they know it's slightly different.
If you're one of those does a reducing balance new kick is a killer on your P&L.
You're paying the depreciation heavily at the beginning whereas the straight line is an equal amount every year.
But then you've got to really have a, if you're doing a straight line, you've got to have a real disciplined sell, you know, you need to know where you're going to sell.
And some people, unfortunately, they write that plant down to zero, which is not a good look because then you've got like, you might have 100 assets at zero.
And then when, of course, when you sell, and this is the biggest thing that people, sellers don't see where buyers do, is that they might make an operating loss.
So imagine you've got like 15 eight-tonners in the yard, and you've had them for five years.
You've written them down over a straight line over five years, and they're worth zero in your books.
The rest of this transcript — segmented and speaker-labeled, so you land on the exact moment something was said
Search every transcript — by keyword, by phrase, or by meaning, across every show Radar indexes
Trends — what is surging across podcasts, measured against its own baseline
Alerts — when a name you follow appears in a newly indexed episode
No account is needed to search Radar.
