Key-person risk is one of the most common reasons a privately held Australian business is worth less than its headline revenue or earnings may suggest. In a business valuation, owner dependence is not a side issue, it directly affects maintainable earnings, forecast reliability, customer retention, key supplier relationships, and the discount a prudent buyer would […]
In Australian business sales, goodwill and going-concern value are often used interchangeably, but they are not the same thing in valuation terms. For owners, buyers, and advisors, the distinction matters because it affects how much of the sale price is supported by identifiable tangible and intangible assets, how the business is valued under APES 225, […]
Interest rates have a direct and measurable impact on business valuations in Australia because they influence discount rates, capitalisation rates, buyer required returns, and ultimately the multiples paid for profits and revenue. When the cash rate rises, valuation calculations generally become more conservative, as investors and lenders demand a higher return for taking risk. When […]
Owner’s add-backs and normalisation adjustments are central to any rigorous business valuation of an Australian SME. They determine whether reported earnings reflect the true maintainable earnings of the business, which in turn affects EBITDA multiples, SDE calculations, discounted cash flow outcomes, and ultimately the price a buyer or lender may treat as fair market value. […]
Preparing an Australian business for sale in 2026 is not just a transaction exercise, it is a valuation exercise. Before a buyer will pay a premium, the business must demonstrate defensible earnings, clean financial reporting, sustainable growth, and a clear risk profile. For owners, the practical question is not simply how to sell, but how […]
APES 225 is the professional standard that shapes how Australian valuers deliver valuation services, and it matters because business owners, buyers, lenders, accountants, and courts rely on those valuations to make material decisions. For privately held businesses, the standard helps distinguish between a full valuation engagement, a limited scope valuation engagement, and a calculation engagement, […]
Understanding the market, income, and asset approaches is fundamental to any business valuation under APES 225. These three approaches provide the framework a valuer uses to assess fair market value or market value for a privately held business, with the chosen method depending on the business model, financial profile, asset base, and purpose of the […]
Future maintainable earnings (FME) is the starting point for most private business valuation assignments in Australia. It is the valuer’s estimate of the earnings a normalised business can reasonably sustain going forward, after removing unusual, non-recurring, and owner-specific items from historical results. For SME owners, understanding how profits are normalised is critical because the value […]
Choosing a capitalisation multiple is one of the most important judgement calls in a business valuation of an Australian SME. The multiple converts maintainable earnings into value, so it reflects not just how much profit a business makes, but how reliable, transferable, and sustainable those earnings are. In practice, a well-supported multiple is built from […]
The capitalisation of Future Maintainable Earnings (FME) is one of the most widely used business valuation methods for Australian small and medium-sized enterprises (SMEs). In simple terms, it converts the earnings a business is expected to maintain into a value by applying an appropriate capitalisation multiple, which reflects risk, growth prospects, and the sustainability of […]