Industrial business valuation answers
Short, direct answers to the questions manufacturers, 3PL and logistics operators, transport companies and other industrial business owners ask about valuations. Each one links to the full guide.
Manufacturing
- How much is my manufacturing business worth?A manufacturing business is usually worth the earnings it can sustain, after a realistic allowance for replacing its plant, capitalised at a rate that reflects its risks. The biggest drivers are how stable those earnings are, how much rests on a few customers or the owner, and what the machinery will cost to keep running.
- How is a contract manufacturer valued?A contract manufacturer is valued on the earnings its supply agreements can sustain, after the capital spending its lines need. Buyers focus on how long the agreements run, whether material and wage increases pass through, how many brand owners it depends on, and the approvals and quality systems that make moving production elsewhere slow and costly for customers.
- How is a CNC machining or precision engineering business valued?A CNC machining or precision engineering business is valued on the earnings it can sustain after the cost of keeping its machines current. The main drivers are how many spindle hours it sells and at what rate, the share of repeat work on proven programs, the quality approvals that keep it on supplier lists, and owner dependence.
- Does machinery add to the value of my business?No, not on top of the earnings it helps produce. Machinery the business needs is already inside an earnings-based value, so owning plant worth $3 million does not lift the value by $3 million. Machinery changes value through the replacement spending it will need, the finance owing on it, any surplus units, and a floor when earnings are weak.
- What EBITDA multiple is a manufacturing business worth?There is no standard EBITDA multiple for a manufacturing business. The multiple is the result of a valuation, not an input. It rises with scale, stable margins, a spread of customers, repeat or contracted volumes and management below the owner, and falls with heavy replacement capex, one dominant customer, cyclical demand and an owner the business cannot run without.
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- How long does an industrial business valuation take?A smaller industrial business, turnover under $2 million, takes 2 business days; an established one, turnover $2 million to $10 million, takes 3 business days. Delivery time starts once payment and all required information have been received. Complex and expert matters have timing agreed before we start. The biggest variable is how quickly complete information arrives.
- What documents do I need to value a manufacturing business?Start with three years of financial statements, year-to-date management accounts and tax returns. For a manufacturer, add the plant and equipment register with finance balances, revenue and gross margin by customer, stock and work in progress listings, key customer and supply agreements, the premises lease and a staff list. The engagement letter confirms the exact list.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
- How is a shareholder buyout valued in an engineering or manufacturing company?A buyout price begins with what the shareholders agreement says about the basis of value, the valuation date and any minority discount. The company is valued as a whole on maintainable earnings, adjusted for the departing owner's role, and the parcel is then valued either pro rata or allowing for its lack of control, as the agreement and purpose require.
3PL and logistics
- How much is a 3PL business worth?There is no standard price or multiple for a 3PL. It is worth its maintainable earnings after rent and wages, capitalised at a rate set by how secure those earnings are. Value rises with client commitments that match the lease, full sites, rates that move with costs and deep system integration, and falls when one client dominates.
- Do short-term or month-to-month 3PL contracts reduce business value?Often, but not automatically. A client on a rolling agreement can leave at short notice while the lease, racking finance and permanent staff stay, so buyers discount that revenue. Long tenure, systems built into the client's operations and a wide spread of clients can offset short paper terms. One large rolling client usually cannot be offset.
- How does a warehouse lease affect the value of a logistics business?A warehouse lease affects value through its rent, remaining term and obligations. The business is valued on earnings after a market rent; buyers then test whether the lease outlasts client contracts, whether options and landlord consent allow a sale, and what make good will cost. A short lease on a site that is hard to replace lowers value.
- How is a trucking or transport company valued?A trucking company is valued on the earnings left after properly funding its fleet, not on EBITDA or the resale value of its trucks. The biggest drivers are fleet age and finance, how much freight runs under contracts with fuel and cost recovery, reliance on a few customers, driver stability, and the strength of its Chain of Responsibility systems.
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- How long does an industrial business valuation take?A smaller industrial business, turnover under $2 million, takes 2 business days; an established one, turnover $2 million to $10 million, takes 3 business days. Delivery time starts once payment and all required information have been received. Complex and expert matters have timing agreed before we start. The biggest variable is how quickly complete information arrives.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
Transport
- How much is a 3PL business worth?There is no standard price or multiple for a 3PL. It is worth its maintainable earnings after rent and wages, capitalised at a rate set by how secure those earnings are. Value rises with client commitments that match the lease, full sites, rates that move with costs and deep system integration, and falls when one client dominates.
- How does a warehouse lease affect the value of a logistics business?A warehouse lease affects value through its rent, remaining term and obligations. The business is valued on earnings after a market rent; buyers then test whether the lease outlasts client contracts, whether options and landlord consent allow a sale, and what make good will cost. A short lease on a site that is hard to replace lowers value.
- How is a trucking or transport company valued?A trucking company is valued on the earnings left after properly funding its fleet, not on EBITDA or the resale value of its trucks. The biggest drivers are fleet age and finance, how much freight runs under contracts with fuel and cost recovery, reliance on a few customers, driver stability, and the strength of its Chain of Responsibility systems.
- Does machinery add to the value of my business?No, not on top of the earnings it helps produce. Machinery the business needs is already inside an earnings-based value, so owning plant worth $3 million does not lift the value by $3 million. Machinery changes value through the replacement spending it will need, the finance owing on it, any surplus units, and a floor when earnings are weak.
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- How long does an industrial business valuation take?A smaller industrial business, turnover under $2 million, takes 2 business days; an established one, turnover $2 million to $10 million, takes 3 business days. Delivery time starts once payment and all required information have been received. Complex and expert matters have timing agreed before we start. The biggest variable is how quickly complete information arrives.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
- How is a shareholder buyout valued in an engineering or manufacturing company?A buyout price begins with what the shareholders agreement says about the basis of value, the valuation date and any minority discount. The company is valued as a whole on maintainable earnings, adjusted for the departing owner's role, and the parcel is then valued either pro rata or allowing for its lack of control, as the agreement and purpose require.
Engineering
- How is a CNC machining or precision engineering business valued?A CNC machining or precision engineering business is valued on the earnings it can sustain after the cost of keeping its machines current. The main drivers are how many spindle hours it sells and at what rate, the share of repeat work on proven programs, the quality approvals that keep it on supplier lists, and owner dependence.
- Does machinery add to the value of my business?No, not on top of the earnings it helps produce. Machinery the business needs is already inside an earnings-based value, so owning plant worth $3 million does not lift the value by $3 million. Machinery changes value through the replacement spending it will need, the finance owing on it, any surplus units, and a floor when earnings are weak.
- What EBITDA multiple is a manufacturing business worth?There is no standard EBITDA multiple for a manufacturing business. The multiple is the result of a valuation, not an input. It rises with scale, stable margins, a spread of customers, repeat or contracted volumes and management below the owner, and falls with heavy replacement capex, one dominant customer, cyclical demand and an owner the business cannot run without.
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- How long does an industrial business valuation take?A smaller industrial business, turnover under $2 million, takes 2 business days; an established one, turnover $2 million to $10 million, takes 3 business days. Delivery time starts once payment and all required information have been received. Complex and expert matters have timing agreed before we start. The biggest variable is how quickly complete information arrives.
- What documents do I need to value a manufacturing business?Start with three years of financial statements, year-to-date management accounts and tax returns. For a manufacturer, add the plant and equipment register with finance balances, revenue and gross margin by customer, stock and work in progress listings, key customer and supply agreements, the premises lease and a staff list. The engagement letter confirms the exact list.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
- How is a shareholder buyout valued in an engineering or manufacturing company?A buyout price begins with what the shareholders agreement says about the basis of value, the valuation date and any minority discount. The company is valued as a whole on maintainable earnings, adjusted for the departing owner's role, and the parcel is then valued either pro rata or allowing for its lack of control, as the agreement and purpose require.
Mining services
- How is a CNC machining or precision engineering business valued?A CNC machining or precision engineering business is valued on the earnings it can sustain after the cost of keeping its machines current. The main drivers are how many spindle hours it sells and at what rate, the share of repeat work on proven programs, the quality approvals that keep it on supplier lists, and owner dependence.
- Does machinery add to the value of my business?No, not on top of the earnings it helps produce. Machinery the business needs is already inside an earnings-based value, so owning plant worth $3 million does not lift the value by $3 million. Machinery changes value through the replacement spending it will need, the finance owing on it, any surplus units, and a floor when earnings are weak.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
Industrial services
- Does machinery add to the value of my business?No, not on top of the earnings it helps produce. Machinery the business needs is already inside an earnings-based value, so owning plant worth $3 million does not lift the value by $3 million. Machinery changes value through the replacement spending it will need, the finance owing on it, any surplus units, and a floor when earnings are weak.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- How is a shareholder buyout valued in an engineering or manufacturing company?A buyout price begins with what the shareholders agreement says about the basis of value, the valuation date and any minority discount. The company is valued as a whole on maintainable earnings, adjusted for the departing owner's role, and the parcel is then valued either pro rata or allowing for its lack of control, as the agreement and purpose require.
Wholesale and distribution
- How does a warehouse lease affect the value of a logistics business?A warehouse lease affects value through its rent, remaining term and obligations. The business is valued on earnings after a market rent; buyers then test whether the lease outlasts client contracts, whether options and landlord consent allow a sale, and what make good will cost. A short lease on a site that is hard to replace lowers value.
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- What documents do I need to value a manufacturing business?Start with three years of financial statements, year-to-date management accounts and tax returns. For a manufacturer, add the plant and equipment register with finance balances, revenue and gross margin by customer, stock and work in progress listings, key customer and supply agreements, the premises lease and a staff list. The engagement letter confirms the exact list.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
General
- How much does a business valuation cost for a manufacturer or logistics company?The fee is fixed by annual turnover, not charged by the hour. Turnover under $2 million: From $1,495 + GST. Turnover $2 million to $10 million: From $2,495 + GST. Turnover over $10 million, or several divisions or sites: From $3,495 + GST. Disputes and litigation support: Quoted individually. Extra related entities and extra valuation dates are priced as add-ons.
- How long does an industrial business valuation take?A smaller industrial business, turnover under $2 million, takes 2 business days; an established one, turnover $2 million to $10 million, takes 3 business days. Delivery time starts once payment and all required information have been received. Complex and expert matters have timing agreed before we start. The biggest variable is how quickly complete information arrives.
- How does relying on one major customer affect my business value?Relying on one major customer usually lowers value, because a single decision by that customer could remove a large share of profit while overheads stay. How much depends on the share of earnings at risk, the contract's term, termination and change of control clauses, how easily the customer could switch supplier, and how long the relationship has lasted.
- Do I need a valuation before selling my industrial business?Usually there is no legal requirement to value a business before an arm's length sale, but most industrial sellers benefit from a valuation. It tests your earnings, plant, working capital and customer risks before a buyer does and sets a realistic price. Tax rules can make market value essential, as in related-party sales or the small business CGT concessions.
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