Business Valuation in Australia: What Your Business Is Actually Worth

The Method: EBITDA Multiples

The vast majority of Australian small and medium business sales are priced using a multiple of adjusted EBITDA — earnings before interest, tax, depreciation, and amortisation. This is true whether the business is a trade firm, a professional services practice, a manufacturer, or a retailer.

The formula looks simple: Adjusted EBITDA × Multiple = Enterprise Value. But each component involves significant judgement — and buyers and sellers regularly disagree on both.

The "adjusted" part is where most valuation conversations go wrong. Before applying any multiple, a buyer will recast your earnings to reflect what the business would generate under professional management, without the owner's personal expenses, above-market salary, or one-off items inflating the number. See what adjusted EBITDA means for a business sale for the full mechanics.

Australian EBITDA Multiples by Industry (2026)

Multiples vary significantly by industry, business quality, and deal size. These are realistic ranges for Australian SMBs selling in 2026:

Industry	Typical Multiple Range	Key Value Driver
Professional Services	2.5x – 5x	Client transferability, recurring fees
Manufacturing	2.5x – 5x	IP, supply contracts, plant condition
Trade & Construction	2x – 3.5x	Crew depth, repeat contracts
Retail	1.5x – 3x	Location, lease, online revenue mix
Technology / SaaS	4x – 8x+	ARR, churn rate, scalability
Healthcare / Allied Health	3x – 6x	Patient retention, practitioner depth
Distribution / Wholesale	2x – 4x	Exclusive supplier relationships

These ranges assume the business is owner-operated with a clean earnings history. A business with recurring contracted revenue, low owner dependency, and a capable management team can achieve the upper end or beyond. A business where the owner is the business typically sells at or below the midpoint.

The Three Biggest Levers on Your Multiple

1. Recurring revenue

Buyers pay a significant premium for predictable, contracted, or subscription-based revenue. A plumbing business with 20 commercial service contracts is worth materially more than one doing equivalent turnover on one-off residential jobs. See how recurring revenue affects your multiple.

2. Owner dependency

If the business cannot run without you, buyers price the risk of you leaving. This is the single most common reason Australian small business sales fall through or achieve discounted prices. The fix takes time — which is why starting 18 months before you list matters. How owner dependency reduces your sale multiple.

3. Customer concentration

If one customer accounts for more than 20–30% of revenue, most buyers will either apply a meaningful discount or walk away. The logic is simple: if that customer leaves after acquisition, the business they paid for no longer exists. Diversifying your customer base before sale is one of the highest-ROI preparation steps.

Valuation by Business Type: Detailed Guides

Each industry has its own valuation logic, buyer pool, and deal structure norms. Follow the relevant guide below for a deeper analysis:

The Earnings Adjustment: Why Your Number Shrinks

Most owners are surprised by how much their earnings change during a buyer's recasting process. A business showing $500k net profit may have an adjusted EBITDA of $300–$350k once a buyer finishes their analysis. The main adjustments:

• Owner salary normalisation: If you pay yourself $350k but a replacement manager would cost $140k, buyers add back $210k — but then subtract a $140k management cost. Net effect varies by how your salary compares to market.
• Personal expenses: Vehicle, phone, travel with a personal component — buyers remove these from expenses (adding them back to earnings).
• Non-recurring items: One-off costs (e.g. a legal dispute now resolved) are added back. One-off revenue (e.g. a government grant) is removed.
• Related-party transactions: Rent paid to a related entity above or below market is normalised. This is especially common in family businesses.
• Capex normalisation: If you've been underinvesting in the business, buyers may reduce earnings to reflect the required ongoing maintenance capital.

Understanding how buyers recast EBITDA before you sit down with a buyer is one of the highest-value things you can do in sale preparation.

Asset Sales vs Share Sales and Valuation

In an asset sale, the buyer acquires specific assets — equipment, IP, goodwill, customer contracts. In a share sale, they buy your company and inherit everything, including liabilities. The deal structure affects both the valuation method and the after-tax outcome, and should be understood well before any offer is made.

Tax: What You Keep After the Sale

The enterprise value is not what you walk away with. Tax — particularly capital gains tax — can significantly affect the real outcome. Australian small business owners may qualify for:

• 50% general CGT discount (for assets held 12+ months)
• 50% active asset reduction (on top of the above)
• Retirement exemption — up to $500k tax-free, lifetime
• 15-year exemption — complete CGT exemption if owned 15+ years and age 55+

Stack these correctly and a $2M gain can become a minimal tax bill. But the structure, timing, and ownership tests have to be right. Get tax advice before you go to market, not after you sign. See how much tax you'll pay when you sell your business in Australia.

Frequently Asked Questions

How is a small business valued in Australia?

Most Australian small businesses are valued using a multiple of adjusted EBITDA. The buyer recasts your earnings to reflect what the business will generate under professional management, then applies a multiple based on business quality, scale, and transferability. Multiples typically range from 1.5x to 5x for SMBs under $5M in sale price.

What EBITDA multiple do Australian businesses sell for?

Most Australian SMBs sell for 2x–4x adjusted EBITDA. Professional services businesses often achieve 2.5x–5x, manufacturing businesses 2.5x–5x, retail businesses 1.5x–3x, and trade businesses 2x–3.5x. Businesses with recurring revenue and low owner dependency achieve higher multiples.

What is adjusted EBITDA?

Adjusted EBITDA is your earnings after removing the owner's above-market salary, personal expenses run through the business, and non-recurring items. Buyers use this normalised figure — not your headline profit — as the basis for valuation.

What factors increase the value of a business in Australia?

The main value-increasing factors are: recurring or contracted revenue, low owner dependency, diversified customer base, clean auditable financials, growing EBITDA trend over 3 years, and a capable management team that stays post-sale.

How do I get my business valued in Australia?

You can get an indicative valuation from a business broker, qualified valuator, your accountant, or via Succession Advisory's free online assessment. For formal valuations required for legal or tax purposes, engage a certified business valuator.