Business Valuation: The Key to Selling Your Business for More Than You Imagined
- Future Accounting
- Sep 22
- 3 min read
Written by: Melissa Cunliffe (CA)
How a professional business valuation can help you exceed your target sale price
Every now and then, we work with a business owner who’s ready for the next chapter - whether that’s retirement, a new venture, or simply stepping back after years of building something successful. A key part of this journey is having a professional business valuation that highlights the company’s true worth and gives potential buyers confidence in the asking price.
When it’s time to sell, one of the biggest challenges owners face is justifying their desired sale price to a buyer who’s conducting thorough due diligence. Often, the business owner has a number in mind - but backing that up with reliable, clear financial data requires more than a basic profit and loss report.
That’s where a structured business valuation process makes all the difference.
Understanding EBITDA in business valuation
To accurately assess the value of a business, we first calculate EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortisation.
This figure strips out non-operational and non-cash expenses, providing a clearer picture of the business’s core profitability. It’s a widely accepted metric used in business valuations because it focuses on operating performance.
Making adjustments and add-backs count
From EBITDA, we drill down into the numbers to identify adjustments - commonly known as add-backs. These are costs that may not be relevant to a new owner or are discretionary in nature. Examples include:
Owner’s personal vehicle or travel expenses
One-time legal or consulting fees
Non-essential staff or family wages
Non-recurring marketing campaigns
By applying these add-backs, we arrive at the Adjusted Net Profit, which reflects the true earning power of the business from an operational standpoint - a vital step in a business valuation.
Applying the right valuation multiple
Once we’ve established the adjusted profit figure, we apply an industry-specific valuation multiple. This multiple varies depending on factors such as:
Industry benchmarks
Market demand
Business stability and growth potential
Risk profile
We source reliable data to determine a fair and achievable multiple, ensuring the business is priced competitively, yet accurately reflects its true value.
A recent business valuation success story
Recently, we worked with a client who was looking to sell their business and had a firm sale price in mind. After a thorough financial review, we:
Calculated their EBITDA
Identified several valid add-backs
Presented a professionally prepared financial summary
The result? Buyers quickly saw the true profitability of the business—and it sold well above the owner’s original target price. This is the power of a clear, professional business valuation.
Ready to discover your business’s true value?
If you’re thinking about selling your business or simply want to understand what it’s really worth having the right figures, clearly presented, is critical. Our tailored business valuation services give you clarity, confidence, and an edge in negotiations.
Get in touch with us and take the first step toward your next chapter.
Disclaimer
This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.
Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder
Liability limited by a scheme approved under professional standards legislation.
