Australia

The value of your business and its assets are important in every strategic decision and financial transaction that you undertake.

Share or business valuations may be required for several reasons, including:

  • Preparing for a commercial transaction
  • Arranging tax and stamp duty structures
  • Revising a succession strategy
  • Facilitating dispute resolution
  • Gauging the current health of the business

Regardless of the reason, a business valuation must consider all the key value drivers of the business. The final valuation and its reasoning must be clear and transparent. This should guide the board, management, and shareholders to make strategic and informed decisions.

A comprehensive business valuation expert must do more than โ€œnumber crunching.โ€ Strong industry knowledge, the ability to analyse financial and non-financial information and understand current market values and trends are all necessary.

Our Corporate Finance team combines technical expertise, industry knowledge and commercial experience to provide technically supportable and objective valuations.

We take the time to understand your business and consider various business valuation methods to select the most suitable for your circumstances.

We provide valuation services in relation to the following:

  • Business acquisitions and divestments
  • Funding and financing decisions
  • Independent expert reports
  • Impairment testing
  • Purchase price allocations and other financial reporting purposes
  • Valuations of executive options
  • Valuations of minority interests
  • Shareholder and partnership disputes
  • Taxation, including for stamp duty and capital gains tax purposes
  • Succession planning
  • Restructuring

Learn more about business valuations online orย contact your local William Buck Business Advisor for more information.

FAQs

When should a business valuation be conducted?

If a business is undergoing a transaction, investment, or succession, a business valuation should be conducted early in the process to ensure that all parties are well-informed. Additionally, business valuations should be conducted at least every few years to better understand a companyโ€™s market value and business value.

How long does the business valuation process take?

A business valuation typically takes a few weeks to finalise. However, the time it takes to value a business can vary depending on the following factors:

  • The business valuation methods used: some companies may require additional considerations such as an asset valuation or a comparative assessment of similar businesses
  • The size of the business: A small business valuation is usually more straightforward than larger companies
  • The services required: A thorough, detailed and comprehensive valuation takes time but benefits the business immensely, because it provides an independent viewpoint of the strengths, challenges and weaknesses of a business.

What are the challenges in valuing startups?

Although a small business valuation is beneficial in determining the companyโ€™s potential future profits, challenges can prevent a realistic value. Some include:

  • Minimal business history: Without substantial previous data it can be difficult to predict a fair price
  • Limited business assets: A lack of tangible and intangible assets can minimise a startupโ€™s expended potential value
  • Uncertainty in future evolution: Without a solidified position in the market, it can hinder a business plan that accurately considers future earnings and cash flows

How are companies valued during transactions?

Whether youโ€™re selling or buying, a businessโ€™s worth must be identified for risk management and negotiation purposes. Some valuation considerations include:

  • Historical performance: A great indicator of future financial and customer patterns and key trends.
  • Growth potential: Multiplying the businessโ€™s gross earnings by earnings multiple can determine the future business and market growth.
  • Assets: If a company has excessive tangible and intangible assets, such as buildings and goodwill, this is an important consideration
  • Market comparison: Comparing the transactions of similar businesses that are in the same industry can infer the market condition.

Explore William Buck transaction banking services to learn more about valuation.

Valuations Specialists