How your industry shapes a business valuation

Same principles, different evidence

Every business valuation asks the same core questions. What earnings can the business keep producing? How risky are those earnings? What would an informed buyer pay, and what actually transfers to them?

A dental practice and a civil contractor can report the same profit and be worth very different amounts. The difference is rarely the profit figure itself. It is how dependable that profit is, who generates it, what capital it needs and how many buyers would want it.

Below is what we look at first in each sector. It is a guide, not a checklist, and many businesses straddle two. Whatever the sector, the valuation is prepared and signed by a suitably qualified business valuer at Valuation Group.

Professional services

Accounting, legal, engineering, architecture and consulting firms sell people's time and judgement, so the first question is how much of the client base stays if a principal steps back. Recurring work, such as annual compliance and retainers, usually carries more value than project work that must be won again each year.

Work in progress needs care, because unbilled time is easy to overstate. A firm with documented processes, staff who deal directly with clients and no dominant client generally carries less risk than one built around its founder.

Health and medical practices

Medical, dental, allied health, veterinary and pharmacy businesses are valued quite differently. In some medical and allied health practices, practitioners pay the practice a service fee, so the practice's own earnings can be those fees plus any income it bills directly, not the total billings through the rooms.

The central question is whether patients come back to the practice or follow an individual practitioner, and whether practitioner agreements keep the team in place. Fit-out and the lease matter more than in most service businesses. For pharmacies, state and territory ownership rules limit who can buy, which narrows the pool of buyers.

Trades and construction

For builders, electricians, plumbers and specialist contractors, value usually sits in the order book, the customer relationships and the team, not in the vans. We look at forward work and how it was won, the margin achieved on completed jobs, and whether the owner is the estimator, supervisor and main contact all at once.

Trade and building licences are issued to a named person or company, so a buyer generally needs to hold or obtain the right licence themselves. Retentions, warranties and open disputes can also reduce the price.

Retail and e-commerce

Retail value turns on gross margin, stock and the lease. Stock must be counted properly at the valuation date, because aged lines are often carried at more than a buyer would pay.

For online businesses, the key is where customers come from. A store that depends on paid advertising or a single marketplace carries different risk from one with repeat buyers, its own customer list and direct traffic. Supplier terms and return rates also matter.

Hospitality

Cafes, restaurants, bars and catering businesses are shaped heavily by the lease: the remaining term, options, rent reviews and make-good obligations. Wage costs, including penalty rates, and food and beverage costs need to be normalised, especially where the owners work long hours unpaid or underpaid.

Where a liquor licence is involved, transferring it to a buyer needs regulator approval, which affects timing and risk. Many venues trade on the operator's reputation, so a buyer asks what happens when the owners leave.

Manufacturing and industrial

Manufacturers and industrial service businesses need capital to keep earning, so a fair view of maintainable earnings has to allow for plant that will need replacing. Customer concentration is common and matters: one customer taking a large share of sales is a real risk to a buyer, however long the relationship.

We also look at capacity, the order book, margins by product line, working capital and any site or environmental obligations. Where plant is a large part of the value, we may rely on a separate plant and machinery valuation that you obtain.

Transport and logistics

Trucking, courier, warehousing and third-party logistics businesses depend on contracts and on the fleet. Contract terms, renewal dates and how few customers make up the revenue often matter more than the headline profit.

Fuel, maintenance, drivers and the age of the fleet decide what is truly left for an owner. A business running an ageing owned fleet and one leasing newer vehicles can show similar profits and need very different amounts of future capital.

Technology and software

For software and SaaS businesses, the quality of recurring revenue sits at the centre: churn, how much existing customers expand, contract length, and gross margin after hosting and support. Development costs need care, whether expensed or capitalised, and so does revenue billed annually in advance.

Businesses not yet profitable often cannot be valued on current earnings, so the approach changes, and we say so when we quote. Ownership of the code should be clear, especially where contractors wrote it.

Agriculture

Farming businesses combine an operating business with large assets: land, water entitlements, plant and livestock. Earnings swing with seasons and commodity prices, so one year rarely tells the story and we look across several.

A key question is which earnings belong to the farming operation and which reflect the land and water it uses, particularly when they sit in a different family entity. We value the business and the ownership interests. Where land or water is material, the report relies on separate valuations of those assets from appropriately qualified valuers, which you arrange.

Financial services and insurance broking

Financial planning, insurance broking, mortgage broking and similar businesses are valued largely on recurring income: ongoing fees, renewal commissions and trail. The questions are how secure that income is and whether clients will stay with a new owner.

These businesses generally operate under an Australian financial services or credit licence, or as representatives of a licensee, and those arrangements affect what a buyer can take over and how quickly. Where commission rules have changed, past income may be a poor guide, so the current revenue mix matters most.

Real estate agencies and rent rolls

An agency usually holds two very different businesses: sales, which is volatile and agent-driven, and property management, where the rent roll produces recurring fee income. Rent rolls often sell on their own, and price depends on the detail: the number of managements, rent and fee levels, landlord retention, and how many properties sit with one investor.

Landlords can generally end a management agreement on notice, subject to its terms, so retention after a sale is the main risk. Sales businesses are usually valued more cautiously because listings tend to follow individual agents.

Same profit, different value

Industry and the 30 June 2027 date

The CGT changes from 1 July 2027 depend on who owns the business, not the industry. For gains that build up from that date, the 50% CGT discount for Australian resident individuals and trusts (including individuals' shares of partnership gains) is generally replaced by cost base indexation, and resident individuals generally pay at least 30% tax on those gains. Companies can't use the 50% discount, so the 30 June 2027 rule for individuals and trusts does not apply to a company's own assets, although a company's pre-CGT assets are separately reset at 1 July 2027.

For affected owners, a market value as at 30 June 2027 (just before 1 July 2027) is the default way to separate the earlier gain from the later one. The law also lets the Government set an apportioning method, but that method is still a draft (released for consultation in August 2026, not yet final). A valuation is an option, not an obligation, and whether it suits you is a question for your tax adviser.

Industry does change the practical side: businesses that hold stock may want a proper stocktake at 30 June 2027. A valuation as at 30 June 2027 is prepared after that date, once your records to 30 June 2027 are available. You can book your place now.

Fees do not change by industry

The fee follows the size and complexity of the engagement, not the sector.

• One business or ownership interest with annual turnover under $10 million: one fixed fee of $999 + GST for a full valuation report, delivered in 2 business days for turnover under $2 million and 3 business days for turnover $2 million to $10 million.
• Turnover over $10 million, groups, several entities or interests, or specialist analysis: Quoted in writing.

Delivery time starts once payment and all required information have been received, and pauses while we wait for answers to our questions or your signed representation letter. 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.

Sector can affect scope. A rent roll sale or an early-stage software business may need more analysis, and we tell you before you engage us.