Your business is almost always your biggest financial asset. Owners who know its value make sharper decisions on capital, exit timing, employee equity, and everything in between. Owners who don’t get surprised, usually at the worst possible moment. A defensible number, updated regularly, is the foundation of every serious ownership decision.
Book a valuation callA business valuation is a considered estimate of what your business would sell for in an arm’s-length transaction, prepared by a Chartered Accountant using a methodology the market accepts. It’s not a gut-feel number, and not a broker’s back-of-envelope multiple of last year’s revenue. It’s a proper calculation you can use to make real ownership decisions.
The most common method for established, profitable businesses is multiple of normalised earnings. Start with reported profit. Adjust it to reflect what a typical buyer could expect to earn moving forward, stripping out one-off costs, related-party rent, under-market owner salaries, and anything else that isn’t a genuine ongoing cost of doing business. Then multiply that normalised earnings figure by a market multiple that reflects how good the business actually is.
Every business owner should know their number and update it at least annually. It changes what you optimise for. It changes the offers you’ll accept and reject. It changes how much you draw in salary versus retain in the company. It changes when you start bringing key employees into ownership. Not knowing your number is expensive; knowing it, and knowing what drives it, is where compounding value comes from.
Our valuations are for owners understanding their number, capital raises, ESOP grant-date valuations, buy-ins and buy-outs between shareholders, and other equity transactions. They sit one level below the formal sworn-valuation regime used for court proceedings, bank facilities and family-law matters. If your matter needs a sworn or independent-expert valuation prepared under the professional valuation standard, we’ll refer you to a specialist valuations firm. This isn’t the work we do.
Pull the last three years of financial statements. Identify the profit measure that best reflects the business: EBITDA is standard; net profit for owner-operated small businesses. Establish the trajectory: flat, growing, declining, cyclical.
Adjust reported profit for anything that isn’t a genuine ongoing cost of doing business. Related-party rent above or below market. Owner salaries above or below market. One-off legal or professional fees. Discontinued operations. Personal expenses run through the business. What you’re left with is what a rational new owner would actually earn.
The multiple that reflects how good the business is: reliance on the owner, customer concentration, quality of the management team, systems and processes, recurring revenue, growth trajectory, margin quality, market position. Benchmarked against comparable private transactions in the sector.
Business value = normalised earnings × multiple. Simple maths. All the work is in getting the two inputs right.
Where the business supports it, sense-check the answer with a second approach: DCF for high-growth businesses, asset-based for property-heavy ones, comparable-transaction analysis where recent deals exist. Two methods pointing to the same range give you confidence.
A written valuation summary that sets out the methodology, the normalisation adjustments, the multiple selected and the comparables it’s benchmarked to, and the resulting value range with a midpoint. Something you can hand to a board, a buyer, a co-owner or an investor and defend line by line.
The 12–36 months before a sale is when knowing your number matters most. A valuation frames the negotiation, sets your walk-away point, and shows you the two or three levers most likely to move the multiple before the buyer arrives.
Whether it’s an equity partner, a strategic investor, or a private-capital buyer taking a stake, the deal starts with a defensible number. Get valued before the term sheet, not after.
Every partnership eventually needs a way to price a buy-out. A pre-agreed valuation methodology in the shareholders’ agreement, with a real number attached each year, is the difference between a clean transition and a stalled deal.
Option grants under the Australian start-up concessions require a market-value grant price. A CA-prepared valuation is what makes the tax treatment defensible and the plan work as intended.
Investors expect a defensible pre-money number and the reasoning behind it. A valuation set before you go to market gives you the anchor for the round rather than negotiating from whatever the first term sheet suggests.
For owners with no immediate transaction planned, an annual indicative valuation still earns its keep. It informs how much to draw versus retain, when to start ESOP conversations, whether to raise or hold, and how the business is tracking against the plan.
Every valuation engagement is scoped and quoted upfront: no hourly billing, no surprises. A short indicative valuation for internal use sits at one end. A full written valuation for a transaction, an ESOP grant or a capital raise sits at the other. We give you the number and the scope before you commit.
For clients on a Virtual CFO or Tax Planning retainer, an indicative valuation is refreshed annually as part of the advisory relationship. Transactional valuations are scoped separately as a project when the trigger arrives.
Book a valuation callThe multiple isn’t a magic number. It’s the inverse of the return the buyer wants on their investment. A 3× multiple implies a 33% annual return. A 5× implies 20%. A 10× implies 10%. Buyers price the multiple against the risk of running the business: a lower multiple compensates for higher risk, a higher multiple signals a business the buyer feels safe paying up for.
Between 1× and 5× is where most private-business transactions happen. Weak businesses transact at 1–2×. Average businesses transact at 3×. Genuinely good businesses reach 4–5× when the buyer is comfortable accepting a 20–25% return.
The tail (6×, 10×, occasionally much higher) is where the buyer sees synergies or is buying an asset rather than cash flow: a client list, a brand, technology, market position. That’s why Mark Zuckerberg paid $1 billion for Instagram when it had 13 employees and no revenue.
The multiple isn’t chosen. It’s earned. These are the levers most owners can pull in the 12–36 months before a sale, capital raise or ESOP grant to shift the number from a three to a four, or a four to a five.
If the business needs the owner in the room for every sale, every decision, the buyer discounts the multiple. Building a business that runs without the founder is the single biggest driver of multiple expansion.
A business where one client is 30–50% of revenue is one email away from a valuation haircut. Diversifying the client base is often the highest-return activity in the year before a sale.
A business with two or three senior people running it below the founder trades at a materially higher multiple. This is where an ESOP earns its keep: real ownership for the people who run the operation.
Documented, repeatable systems mean the business can be run by someone other than the incumbents. Buyers pay for that. If it lives only in the founder’s head, they pay less.
The higher the proportion of revenue that repeats month after month, the higher the multiple. Recurring revenue is the closest thing a private business has to compound interest.
A business growing 15%+ a year commands a materially higher multiple than a flat business at the same profit level. Buyers pay for forward trajectory, not just for static earnings.
High and stable gross margins signal pricing power. Volatile or declining margins signal competitive pressure. Improving margins lifts both the multiple and the earnings the multiple is applied to.
Category leadership, brand strength, defensible IP, strong reputation. All of these support a higher multiple. The clearer the story of why this business wins in its market, the higher the buyer pays.
Illustrative composite. Numbers are indicative of the kind of outcome this method produces; not a specific client. This is the same example walked through in the explainer video above.
The business. A 40-person specialist manufacturer, 12 years old, doing about $25m revenue and $5m reported profit. Owner-operated, two long-serving key managers running operations and sales, moderate customer concentration (largest client 22% of revenue), most revenue transactional rather than contractual.
The normalisation. Reported profit was $5m. Normalisation adjustments: owner paying themselves $200k when the market rate for the CEO role was $300k (−$100k). Related-party rent on the factory $150k above market (+$150k adding back to profit). Once-off legal fees for an unfair-dismissal matter that won’t repeat (+$60k). Normalised earnings landed at approximately $5.6m, the number a rational new owner would expect to earn.
Same business, same $5.6m of normalised earnings, three genuinely reachable numbers between $16.8m and $28m. Every owner should know which multiple they’re currently priced at, and what the specific work is to move up one turn. That’s the game in the years before an exit, a raise, or an ESOP grant.
Methodology, financials analysed, normalisation adjustments with reasoning, multiple selected and comparable-transaction benchmarks, value range with a midpoint. Something you can hand to a board, a buyer, an investor or a co-owner and defend line by line.
Every adjustment to reported profit, each with a reason and a supporting workpaper. The single most-scrutinised part of a valuation, done properly so it holds up under buyer or investor diligence.
Not a made-up number. The multiple benchmarked against recent private-market transactions in your sector, with the reasoning for why your business sits where it does on that range.
Ranked list of the specific factors currently pulling your multiple down, with the estimated dollar impact of addressing each one. The pre-transaction action plan, essentially.
Selected recent private transactions in your sector, with the multiples they traded at and the reasoning for why they are or aren’t comparable to your business. Useful in negotiation.
The whole report distilled to one page for the board, the shareholders, or the buyer’s opening conversation. The number, the range, and the three sentences that explain how we got there.
Bring what you have: three years of financials, a rough sense of what you think it’s worth, the reason you’re asking now. 25 minutes. We’ll tell you whether a valuation is the right next step, which method fits your business, and what a scoped engagement would cost.
Book a valuation call