Business valuation
Business valuation for owner led Australian businesses
Most SME valuations are produced by accountants. ProfitPulse approaches valuation through the lens of an investment banker who has structured more than 50 large scale transactions across debt, mezzanine and equity finance. The difference shows up in the final number.
Investment from $4,500
Most owners have only one number in their head for what their business is worth, and it usually came from their accountant in passing. Accountants are excellent at compliance, tax and statutory work. Valuation is a different discipline. It draws on transaction experience, an understanding of how acquirers actually think, and a working familiarity with debt, mezzanine and equity structures. Most firms do not do this work day to day, so they rarely build that exposure.
When the valuation conversation matters, a sale, a succession, a capital raise, a partnership change or a dispute, the gap between an accountant grade number and an institutional grade one can run to seven figures.
When you need an independent valuation
Transactional triggers
- Preparing the business for sale within 12 to 36 months
- Raising debt, mezzanine or equity capital
- Buying out a partner, shareholder or family member
- Settling a dispute, divorce or estate matter
- Issuing equity to a key employee
- Pursuing an acquisition that needs benchmarking
Strategic triggers
- Understanding baseline value before planning growth
- Setting valuation uplift targets to drive change
- Identifying the levers that will move the multiple
- Tracking value over time as a performance measure
- Aligning the leadership team to enterprise value
- Preparing for an unsolicited acquirer approach
The methods we apply
A credible valuation triangulates across several methods rather than relying on one, weighting the approach that best fits the business.
Earnings multiples
The most common approach for established businesses. A normalised measure of earnings, usually EBITDA, multiplied by a figure benchmarked to comparable sales. It captures earning capacity directly.
Discounted cash flow
Projects future cash flows over five to ten years and discounts them back to today using a risk weighted rate. The most rigorous method, and the most sensitive to the quality of its assumptions.
Comparable transactions
Benchmarks against the actual sale prices of similar businesses in similar sectors. Strongest where the sector has recent deal activity to draw on.
Net asset value
Values the business as its assets less its liabilities, often revalued to current market value. Usually a floor rather than a full measure, and most relevant for asset heavy or wind down situations.
What moves the multiple
Two businesses with identical revenue and identical earnings can attract very different multiples. The multiple is, at heart, a measure of confidence.
What lifts it
- Recurring and contracted revenue
- A diversified customer base, no client over fifteen percent
- Low owner dependence in delivery and sales
- Depth in key technical and leadership roles
- A sustained margin trajectory over several periods
- Clean financials and reliable forecasts
What compresses it
- Project based or one off revenue with no visibility
- A single client above thirty percent of revenue
- Heavy owner involvement in delivery and sales
- Key person risk on revenue or capability
- Volatile or recently compressed margins
- Reconstructed or unreliable financials
The gap between a compressed multiple and a lifted one is often seven figures for an established SME. Measuring the number is one thing; moving it is another, and that is the work of our exit readiness program. Our guide on how a business is valued covers the fundamentals in plain language.
Who it is for
Owner led businesses across Australia, typically turning over between $1M and $30M, in any of six situations: preparing for a sale, navigating a succession or buyout, raising capital, resolving a dispute, setting a strategic baseline, or responding to an inbound acquirer. Smaller businesses are often served better by a simpler approach, and we will tell you so honestly.
How the engagement runs
Week 1
Scope and data
We agree the purpose, the audience and the methods, then work through a structured data request covering three to five years of financials, contracts and customer information.
Week 2
Normalisation
Historical earnings are adjusted for owner remuneration, one off items and related party transactions. This normalised baseline is the foundation everything else builds on.
Weeks 3 to 4
Method and triangulation
The agreed methods are applied, each producing a range with explicit assumptions, then triangulated into a single conclusion. Where the brief calls for it, we identify the specific levers that could move the multiple, with quantified estimates.
Weeks 5 to 6
Report and walkthrough
A written report with the methodology, assumptions, sensitivity analysis and conclusion, delivered with a walkthrough and structured so your lawyers, lenders or a buyer can use it without rework.
Indicative valuation from $4,500. Comprehensive institutional grade valuation from $13,500. Fixed fee, scoped upfront.
Case study
An engineering consultancy, fourteen months on
A $7M engineering consultancy with 35 staff had been quoted by its accountant at 2.8x EBITDA, putting the business at roughly $4.2M. The owner had been preparing to sell, and the number felt low after eighteen years of building the firm. They sought a second opinion before going to market.
Our review found three structural issues compressing the multiple, none of which the accountant valuation had flagged. Around sixty five percent of revenue depended on three senior engineers, one of them the owner, with relationships held personally rather than by the firm. Roughly eighty percent of revenue was project based with no forward visibility, and recurring contract revenue sat below ten percent. And the intellectual property built over eighteen years lived in the heads of those engineers, not in transferable systems.
Over fourteen months we worked through each one. Senior relationships were distributed across the broader team. A recurring service contract framework was built and sold into the existing client base, lifting recurring revenue from under ten percent to thirty four. Core methodologies were documented into a transferable asset, and reporting was tightened to acquirer standard. The business sold to a larger national firm at 5.1x EBITDA, roughly $7.7M, against the $4.2M the accountant had put forward.
5.1x
EBITDA multiple, up from 2.8x
$3.5M
valuation uplift versus the accountant number
34%
recurring revenue, up from 10%
18%
key person dependence, down from 65%
Client details are anonymised and figures are rounded to protect confidentiality. Results vary by business and are never guaranteed.
Why ProfitPulse
Investment banking lens
Most SME valuations apply textbook methodology. We bring genuine transaction experience across more than 50 large scale deals, the same lens institutional acquirers and lenders actually use.
Transparent pricing
An indicative valuation from $4,500, a comprehensive valuation from $13,500, fixed fee and published openly. In a category where most providers will not quote until they are in your office.
Built to lift, not just measure
A number on its own is less useful than a number paired with the levers to move it. Our valuations identify the specific changes that could shift the multiple, with quantified estimates.
Built on institutional experience
ProfitPulse was founded by a Chartered Accountant whose career was built in investment banking, structuring more than 50 large scale infrastructure transactions across Australia, Asia and Africa, spanning debt, mezzanine and equity finance.
That work teaches a discipline most SME advisors never encounter: how acquirers, lenders and institutional investors actually think about value. What they price in, what they discount, and why one business attracts a 6x multiple while a structurally similar one attracts 3.5x. We bring that lens to businesses your size. You can read more about the firm and the bench behind it on our about page.
Common questions
How is this different from a valuation from my accountant?
Accountants are excellent at compliance and statutory work. Valuation, particularly for a sale or a raise, is a different discipline that draws on transaction experience, methodology depth and an understanding of how acquirers think. We bring institutional finance experience built on more than 50 transactions across debt, mezzanine and equity.
What does a business valuation cost?
An indicative valuation starts at $4,500, and a comprehensive institutional grade valuation, suitable for a transaction or dispute, starts at $13,500. Both are fixed fee and scoped upfront, with no hourly billing. Our pricing page sets out how every engagement is sized.
How long does a valuation take?
Three to six weeks from start to final report, depending on scope and data availability. Indicative reports usually run three to four weeks. Comprehensive valuations including discounted cash flow and comparable transaction analysis usually run five to six.
Will the valuation hold up if a buyer’s advisor reviews it?
That is the standard our valuations are built to. The methodology is documented, assumptions are explicit, comparable transactions are cited, and a sensitivity analysis is included, so the report can be used by your lawyers, lenders or a buyer without rework.
Can you help us lift our valuation, not just measure it?
Yes. Valuation work often surfaces the specific levers compressing the multiple. The ongoing work to move from a compressed multiple to a lifted one sits within our exit readiness program, typically over 12 to 36 months alongside the broader fractional CFO engagement.
Do you produce valuations for capital raising?
Yes. Capital raise valuations need extra rigour around growth assumptions and forward scenarios. These usually pair with our capital raise preparation when the broader process is also in scope.
What areas do you work in?
We work with clients across Queensland, New South Wales and Victoria, and remotely with owner led businesses Australia wide. You can see where we work for the detail.
Know what your business is actually worth
A 45 minute discovery call is complimentary. We will discuss your situation, the methods that fit your business, and a fixed fee scope before any engagement begins.