Home – New Forums Other discussions How should I go work out the value of my business to sell it? Reply To: How should I go work out the value of my business to sell it?

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Hi there,

A little late to your post but https://www.business.gov.au/info/exit/value-your-business might help. It sets out the common methods used to value your business.

If you’re not sure how to apply these methods, an accountant or valuation firm may be able to assist in doing so.

You mention running at a small profit. Is this AFTER you are paid? If so, then often you might put your salary back into profits (as, a new owner wouldn’t be paying you if you are not staying on in the business). For example only, your financials suggest a 50K profit, but you paid yourself 50K for the year – this is 100K ‘profit’ to another person if they’re not paying you… with that they could (again for example) pay themselves 75K and still have 25K profit in the business. Also consider how much of the value is you? Prospective buyers might see less value if you are fundamental to the business but won’t be staying on in any capacity. If everything is automated and not reliant heavily on you, that could be more attractive as it’s easier then for the buyer to just pick up and run with it, rather than risk losing clients because you’re no longer involved or having to spend a heap of time learning/training etc.

Check out online ‘business for sale’ websites to see if you can find similar type businesses for sale as this might help set an idea of value. Consider the assets you hold (physical and intangible such as intellectual property – trademarks etc – and good will).

^^ disclaiming as information/food for thought only. I have engaged valuation firms for clients before so have a basic understanding but it is not my area of expertise so would encourage advice from a broker/accountant/solicitor or other professional appropriately qualified in setting a value for your business.

All the best :)