When you need a business valuation
Most founders only think about valuation when a buyer appears. By then the number is already set by the state of the business. The better time is earlier, when you can still change what drives it.
We value businesses for selling and buying, obviously, but also for bringing in or buying out a partner, for restructures where assets move between entities, for family succession, for shareholder agreements and simply for founders who want to know what they are building.
Timing matters too. A valuation done at the end of a strong financial year, with the accounts finalised, carries more weight than one built on half-year management figures. If you are planning a sale, we often run a first valuation early and a second once the improvements show up in the numbers.
- Preparing to sell or responding to an offer
- Buying a business and checking the asking price
- Partner entry, exit or dispute
- Restructuring and transferring a business between entities
- Succession and estate planning
- Annual check-in on value as a planning tool
How we value a small to medium business
There is no single formula. For an established, profitable SME the usual approach is to work out future maintainable earnings and apply a multiple that reflects risk, growth and the market for similar businesses. For asset-heavy or underperforming businesses an asset-based method can be more realistic. Where good comparable sales exist, we use them as a cross-check.
The real work is in normalising the numbers. Owner salaries above or below market, personal expenses through the business, one-off income, related-party rent and unusual years all get adjusted so the earnings figure reflects what a new owner would actually receive.
Then we look at risk: customer concentration, reliance on the owner, contract terms, staff, supplier arrangements and compliance history. These push the multiple up or down, and they are the levers you can pull before a sale.
What a business valuation report includes
You get a written report that sets out the method, the adjusted earnings, the multiple or asset basis used, the reasoning and a value or value range. It is written so a buyer, a lawyer, a bank or a family member can follow it without an accounting degree.
We also include a short section on value drivers: the three or four things that, if changed, would most improve the number. For many clients that section is worth more than the valuation itself.
For partner disputes, shareholder agreements and family matters we can prepare the report to a standard suited to lawyers and mediators. For planning purposes a shorter, lighter format usually does the job and costs less. Tell us what the valuation is for and we will match the depth to the need.
Our business valuation calculator
Want a rough feel before you talk to anyone? Our free business valuation calculator gives you an indicative range from a few inputs: revenue, profit, owner salary and a sense of how dependent the business is on you.
It is a starting point, not an opinion of value. Real valuations need normalised figures, industry context and a proper look at risk. But if the calculator surprises you in either direction, that is a good reason to book a call.
Try it with honest numbers. The temptation is to use the best year, but a buyer will not, and neither will your bank.
Increasing the value of your business before a sale
Value is built, not discovered. Businesses that sell well share a few traits: recurring or contracted revenue, documented systems, a team that can run without the founder, clean financials and a structure that lets the buyer purchase exactly what they want.
Because we also run the accounting, structuring and virtual CFO side, we can help you work on those drivers over one to three years rather than just report on them. A valuation today, a plan, and a second valuation when you are ready to go to market.
Questions we get asked
How much does a business valuation cost?
It depends on the size of the business, the quality of its records and the purpose of the valuation. A planning-level valuation for a straightforward SME is quite different from a formal report for a dispute. We quote a fixed fee once we understand the scope, so there are no surprises.
What multiple do small businesses sell for in Australia?
Multiples vary widely with industry, size, growth, risk and how dependent the business is on its owner. Rather than quote a generic figure, we look at comparable transactions and the specific risk profile of your business. Two businesses with the same profit can sell for very different prices.
Is a valuation the same as the price I will get?
No. A valuation is an evidence-based opinion of value. Price is what a buyer agrees to pay, and it depends on competition, timing, deal structure and negotiation. A solid valuation gives you the footing to negotiate well, but the market has the final say.
How do you value a business that depends heavily on the owner?
Owner dependence is one of the biggest discounts to value. We normalise the owner's role at a market salary, then assess how much revenue would stay if they left. Reducing that dependence over a year or two, through systems and a second-in-charge, is often the single biggest value improvement available.
Can you value a business for a partner buyout?
Yes. Partner entries and exits need a value both sides can accept, and often the shareholder agreement sets the method. We prepare an independent valuation, explain it to each party and help structure the buyout so the tax and funding work for everyone.
