ServicesBusiness Valuations
Business Valuations, Sunshine Coast
Knowing what your business is actually worth changes the decisions you can make about it. A valuation replaces a guess with a number, and an explanation of how it was reached.
When you need a business valuation
Most valuations are prompted by a specific event:
- You are looking to buy a business, and want to know what it is actually worth
- You are preparing to sell, and want a realistic asking price
- You are planning for retirement, or weighing up your retirement options
- A business needs to be valued as part of a divorce or separation
- You are restructuring in response to the tax changes affecting family and discretionary trusts
- You will need a value as at 30 June 2027 for the capital gains tax changes
Capital gains tax and the 2027 changeover
From 1 July 2027, the pre-CGT exemption and the 50% CGT discount are being replaced with an inflation-based method, along with a minimum 30% tax on capital gains. From 1 July 2028, a minimum 30% tax also applies to discretionary and family trusts.
- If you think you will ever sell, restructure or transfer your business, you will need a business valuation as at 30 June 2027
- Getting a valuation early gives you greater clarity, and time to plan for the changes before they take effect
The process, and what you receive
From the first conversation to the finished report. Turnaround is two weeks from when all your information is in.
Working out what you need
- A 15 to 20 minute call with Miranda to get a picture of the business and the level of valuation required
- You receive a proposal with two or three valuation options
- You sign and pay upfront
Getting your information in
- You invite us into your Xero file and send through financial statements, tax returns and related records
- You get access to the valuation portal
- You, and sometimes your broker, answer a questionnaire in the portal about the business
Ours to do
- We come back with any further questions
- You receive your written report
Ready to make a start?
Book a valuation callThe three valuation options
Which one suits depends on what the valuation is for.
Pre-Valuation Estimate
A cost-effective starting point that provides an indicative value based on the information you supply. You receive a valuation range, from low to high, supported by calculations. Does not include a full written report.
- A general estimate of value
- Internal planning or decision-making
- Comparing against another valuation
- Getting a second opinion
Not suitable for court proceedings, or situations where a formal valuation report is required.
Limited Business Valuation
A more detailed valuation including a written report and an explanation of how the value was determined. Generally provides a single estimated value rather than a range, with a high-level qualitative analysis of the business.
- Sharing with business partners or other stakeholders
- Supporting negotiations or internal decisions
- Situations needing a clear written explanation of value
Not intended for court proceedings.
Formal Business Valuation
A comprehensive valuation prepared after a formal review of the business, its financial information and the industry it operates in. You receive a detailed written report setting out the approach, analysis, findings and conclusion.
- Court proceedings
- Legal or dispute-related matters
- Complex transactions
- Situations requiring a detailed and defensible valuation
This is the appropriate option where the valuation may need to withstand formal or independent scrutiny.
What a valuation costs
Fixed fees, per trading entity, set by annual turnover. All prices include GST.
| Annual turnover | Pre-Valuation Estimate | Limited Business Valuation | Formal Business Valuation |
|---|---|---|---|
| Up to $99k | $2,200 | $3,850 | $5,500 |
| $100k to $299k | $2,750 | $4,950 | $7,700 |
| $300k to $999k | $3,300 | $6,050 | $8,800 |
| $1m to $2.99m | $3,850 | $7,150 | $11,000 |
| $3m to $6.99m | $4,400 | $8,250 | $13,200 |
| $7m to $9.99m | $5,500 | $9,900 | $16,500 |
| $10m to $19.99m | $6,600 | $12,100 | $22,000 |
You receive a proposal with two or three options and their prices before anything is committed to.
Same profit, different value
Two businesses can earn the same profit and be worth quite different amounts. A valuation is not one multiple applied to one profit figure, so it also weighs:
- How steady the earnings have been, and whether they are likely to continue
- The risks in the business, and the return a buyer would expect for carrying them
- What the assets are worth against what the earnings suggest
- What similar businesses have actually sold for
- The quality of the financial information behind the numbers
How a value is worked out
No single method suits every business. Which we use depends on the business, the quality of its financial information and what the valuation is for, and often more than one is considered and weighted.
Earnings-based
Capitalisation of future maintainable earnings
For established businesses with a steady record of profit. A sustainable level of earnings is worked out from past results and expected conditions, then capitalised at a rate that reflects the risks and expected returns of the business.
Discounted cash flow
Values the business on its expected future cash flows, brought back to today at a rate that reflects the risk. Used where reliable forecasts exist for the next five to ten years, or to compare growth and investment scenarios.
Asset-based
Summation of net asset values
Values the assets and liabilities of the business. Suits asset-heavy businesses, those without significant goodwill, or where the assets are worth more than the earnings suggest. Also used alongside other methods.
Unadjusted net assets
Total assets less total liabilities, as shown in the financial statements. A simple starting point where little information is available. It does not reflect market value, goodwill or future earnings.
Market-based
Comparable transactions
Looks at what similar businesses have sold for. Useful where there are recent sales of genuinely comparable businesses, and less reliable where a sale carried strategic value that cannot be separated out.
Rule of thumb
Industry benchmarks, such as a multiple of revenue or recurring income. Used only as a supporting reference, because a benchmark cannot reflect the profitability or risks of one particular business.
What a CPA brings to a valuation
A valuation is only as good as the financial information underneath it.
Valuations are led by Miranda Bravo Hollands, CPA, the principal of the practice. As a CPA practice we work with business accounts every day, so the numbers behind the valuation are read with that background.
Who we usually value
Small to medium-sized businesses turning over between $100,000 and $20 million, across a wide variety of industries. Businesses already running on Xero are the most straightforward, because Xero links directly into the valuation software.
Common questions
How do I get a business valuation done?
It starts with a 15 to 20 minute call with Miranda about the business and the level of valuation you need. From there you receive a proposal with two or three options, and once you choose one the report takes two weeks from when all the information has been provided.
How much should a business valuation cost?
Fees are fixed and set by annual turnover, from $2,200 for a Pre-Valuation Estimate to $22,000 for a Formal Business Valuation, including GST. The full schedule is on this page, and you see the price in a proposal before committing.
What is a business with $1 million in sales worth?
Turnover alone does not set the value. For an established small business the starting point is usually its maintainable earnings, weighed against the risks in the business and checked against what similar businesses have sold for. Two businesses with the same sales can be worth very different amounts.
Can a CPA do a business valuation?
Yes. CPA Australia members can provide business valuations in accordance with APES 225 Valuation Services, using recognised economic and valuation principles and, where appropriate, the International Valuation Standards.
How do I find out how much my business is worth?
A business valuation can help determine what your business is worth by considering its financial performance, assets, market conditions, risks and future earning potential.
How do I calculate the value of my small business?
The value of a small business can be calculated using methods such as capitalisation of future maintainable earnings, discounted cash flow, net asset values or comparable sales. Which suits depends on the business and what the valuation is for, and often more than one is used.
Want to know what your business is worth?
A 15 to 20 minute call with Miranda to get a picture of the business and the level of valuation you need.
