What is a business valuation?
A business valuation is a process that establishes the economic value of a business.
People get business valuation reports for many reasons, including selling a business, buying a business, taking on a new partner, financing and even for divorce proceedings.
Calculating the value of a business
Two of the most common questions we get asked are:
- How do I value a business that’s for sale?
- How do I value my own business?
Regardless of whether you’re buying or selling a business, its value comes down to a combination of both the physical and non-physical assets.
Physical assets tend to be things like inventory, equipment and debtors.
Non-physical assets often referred to as “Goodwill” represents the cashflow produced by the business and, most importantly, their reliability. Valuing these assets correctly is critical.
Our valuation reports analyse the cashflow of the business while assessing it’s underlying reliability. We analyse past performance but also consider current conditions to help show the potential future profits you could expect.
Why use us?
We are a long established, professional advisory firm who take pride in delivering a modern and efficient valuation service specifically for businesses across Australia.
We are Chartered Accountants and conform to industry leading Valuation Standards APES 225.
We are not business brokers, so we are not paid a commission. Our service to you always remains independent. We put your needs first.
Some of the industries we work with
Medical and health services
Construction and building
Food and beverage
We have two reports available.
We have our base level return on investment report which we call our ROI Report and we also have our more detailed full business valuation report.
$1,500 – $2,500 depending on circumstances
This involves the examination of the last 3 years financial statements and tax returns (if available), then making real world adjustments to those statements to produce what we call a “normalised profit”. We then apply a weighting to these profits based on relevance and reliability factors. This gives us a weighted average earnings figure. This is then applied to a range of different investment return percentages to provide a guide what an Investor may be willing pay.
Benefits of a return on investment report
- Helps indicate cashflow and profitability
- Provides a range of returns so that you can better negotiate a price
- Less intensive so less expensive
- Can be converted to a full business valuation if required later.
Pricing dependent on circumstances.
A business valuation follows the same initial process of the return on investment report but goes much further and provides you with a value for the goodwill of the business based on examining all the financial and non-financial aspects of the business. It is produced in accordance with the professional standard APES 225 Valuation Services and involves a thorough process of understanding all the relevant risk factors applicable to the business so that we can make an informed determination on the value of the business.
Benefits of a business valuation report
- Locked in valuation
- Thorough due diligence
- Comprehensive report.
Once you have decided to go ahead with purchasing (or selling) a new business we can help with related services such as funding applications, liaising with banks and solicitors, setting up your accounting system, training, and bookkeeping and payroll packages.
You look after your business. We’ll look after your books. Check out our fixed fee packages.
Want an easier way to do you pay? Let us do it for you. Check out our fixed fee packages.