Chat with us on WhatsAppCommon Business Valuation Methods
Understanding the different approaches to valuing your Melbourne business
Multiple of Earnings
The most common method - typically 2-5x EBITDA depending on industry, growth prospects, and risk factors.
Typical Multiples:
- • Service businesses: 2-4x
- • Retail/hospitality: 1.5-3x
- • Manufacturing: 3-5x
- • Technology: 4-8x
Asset-Based Valuation
Based on the net value of business assets plus goodwill. Best suited for asset-heavy businesses or those with significant tangible assets.
Includes:
- • Equipment & machinery
- • Property & real estate
- • Inventory & stock
- • Goodwill & intangibles
Market Comparison
Comparing your business to similar recent sales in the Melbourne market. Provides real-world validation of value.
Factors Considered:
- • Similar industry & size
- • Geographic location
- • Recent sale prices
- • Market conditions
What Increases Your Business Value?
Key factors that Melbourne buyers pay premium prices for
Value Enhancers
Strong Financial Performance
Consistent profitability, growing revenue, healthy margins
Established Customer Base
Loyal customers, recurring revenue, diversified client portfolio
Systems & Processes
Documented procedures, trained staff, operational efficiency
Growth Potential
Market opportunities, scalable model, expansion possibilities
Strong Brand & Reputation
Market recognition, positive reviews, competitive advantages
Value Detractors
Owner Dependency
Business can't operate without owner, no management team
Declining Performance
Falling revenue, shrinking margins, losing market share
Customer Concentration
Over-reliance on few customers, single source of revenue
Poor Financial Records
Incomplete books, cash transactions, unclear profitability
Market Challenges
Declining industry, intense competition, regulatory issues
Our Valuation Process
How we determine fair market value for your Melbourne business
Initial Assessment
We review your business information, financial statements, and market position to understand the fundamentals.
Financial Analysis
Deep dive into revenue trends, profitability, cash flow, and financial health over the past 2-3 years.
Market Comparison
Compare your business to similar recent sales in Melbourne and industry benchmarks.
Risk Assessment
Evaluate business risks, market conditions, and factors that could affect future performance.
Final Valuation
Present a comprehensive valuation report with our offer and reasoning behind the valuation.