Can I value my business myself?

Where your own figure works, and where it struggles

Valuing your own business is a useful exercise: it makes you look hard at what the business earns and how much it depends on you. Whether your figure is enough depends on who else has to rely on it.

If the figure is for tax

The ATO's guide to market valuation for tax purposes says the responsibility for a replicable and defensible figure stays with you, even when you pay a professional. It warns that doing your own valuation risks reporting your tax incorrectly, with possible interest and penalties.

The guide expects whoever values the asset to be knowledgeable and experienced, to stay objective, and to support the figure with credible evidence and a recognised method. Objectivity is the hard part for an owner. You know the business best, but you also have the most riding on the number, and the ATO expects a valuation report to declare the valuer's independence and any conflicts of interest.

For the 1 July 2027 CGT changes, a figure as at 30 June 2027 can only be worked out once your records to that date exist, whoever prepares it. Market value is not the only basis either: some taxpayers may be able to use an apportioning method instead once one is made, and companies are treated differently. Whether you need a valuation at all is a question for your tax adviser.

If you value it yourself, show your working

Write your figure up so that someone else could follow it and reach the same answer. Drawing on what the ATO looks for in a valuation report, your working should cover:

• Why you are valuing the business, and the date the figure is at.
• Exactly what is being valued: the whole business, your shares, your units in a trust or goodwill alone.
• The method you chose and why it suits the business, with a second method as a cross-check where possible.
• The records and evidence you used, and every assumption, with your reasons.
• Only information that was known or reasonably foreseeable at the valuation date.

Problems the ATO says it often sees in reviews include the wrong method, unsupported assumptions and adjustments, and thin documentation. Two traps are especially easy for owners: counting profit without a fair wage for their own work, and borrowing a rule-of-thumb multiple from a different kind of business. See how to value a business for the main methods.

When an independent figure is worth having

When the figure will go into a tax return, a sale to someone close to you or a shareholder exit, an independent valuation gives you reasoning from someone with nothing riding on the result. No valuation rules out an ATO review, but a documented one is easier to explain.

A full valuation report from Independent Business Valuation sets out what is valued, the date, the method, the evidence and the assumptions. Every judgement is made, and the report signed, by a suitably qualified business valuer at Valuo. We charge one fixed fee of $999 + GST for a full valuation report on one business or ownership interest with annual turnover under $10 million. The fixed fee applies once we confirm the interest, purpose, structure and records fit the fixed-fee scope. Anything outside it is quoted in writing before we start. Fixed fee, confirmed in writing before we start. No hourly billing and no surprises.