Services / Valuations

A business valuation is the process of determining the economic value of a business or company. It involves analysing various financial, operational, and market factors to arrive at a fair market value.  

There are several reasons you might need a business valuation. These can include buying or selling a business, a merger or acquisition, Succession planning, determining the value of shares for employee stock options. Partnership/shareholder disputes or obtaining financing [just to name a few!]. 

A business valuation provides an objective assessment of your business‘ worth, helping you make well-informed decisions. Whether you need a valuation for peace of mind, to meet your compliance obligations or to know what to focus on in the future, valuations help you understand your business better!  

A business valuation is conducted using a range of methods depending on the purpose and scope of your valuation.  The appropriate method[s] may also depend on the nature of the business and its financial performance/position.  

Irrespectively, a ‘fair market value’ assessment will calculate what a ‘lay person’ on the street would pay for your business after being fully informed of the circumstances and performance of the business. 

The timeframe for a business valuation can vary depending on the complexity of the business and the availability of relevant information. Generally, it takes anywhere from a few weeks to a couple of months to complete a comprehensive valuation [depending on the accessibility of the information]. 

How often you update your business valuation depends on the specific circumstances and objectives of your business. Some people use valuations to set the goals for the business and know what to focus on to improve the value of the business.  If you’re using the valuation for business improvement purposes, many update their valuation every 2-3 years [or when significant changes occur within their business or industry]. Regardless of the reason, regular updates will help ensure your valuation remains relevant and accurate. 

Our professional valuation experts are committed to maintaining the confidentiality of your sensitive financial information throughout the valuation process. Depending on the purpose, most valuations are conducted by our accounting team in accordance with the professional standards and guidelines of Chartered Accountants Australia and New Zealand. 

Various factors can influence a business’ value including its financial performance, growth prospects, industry trends, competitive landscape, management team, customer base, reliance on key individuals and economic conditions. A professional valuation expert will consider all these factors when determining a fair market value. 

The value of a business can change over time due to various circumstances such as changes in financial performance, market conditions, industry trends and economic factors. It’s recommended to update your business valuation periodically or when significant changes happen within your business or industry to ensure an accurate and up-to-date assessment [depending on why you have done your valuation in the first place]. 

A business valuation can be beneficial for tax planning and compliance purposes. For example, a valuation can help determine the value of a business for estate, CGT or income tax purposes, it can assess the value of goodwill for tax reporting or establish the fair market value of a business for tax-related transactions.