Industrial business valuation questions

What does a valuation cost and how long does it take?

How much does an industrial business valuation cost?

Fees are fixed and set by annual turnover. Smaller industrial business (turnover under $2 million): From $1,495 + GST. Established (turnover $2 million to $10 million): From $2,495 + GST. Complex (turnover over $10 million, or several operating divisions or sites): From $3,495 + GST. Disputes, litigation support and highly specialised matters are quoted individually. We confirm the fee in writing before we start. No hourly billing. See pricing.

How long does a valuation take?

2 business days for a smaller industrial business and 3 business days for an established one. For complex and expert matters, delivery is agreed before we start. Delivery time starts once payment and all required information have been received. Having the information ready is the surest way to shorten the wait.

What can change the fee?

An additional valuation date ($495 + GST each) or an additional entity ($795 + GST each), such as a related trust that owns the plant. A second entity does not by itself move the matter into the complex band; several operating divisions or sites, or a forecast-based valuation, do. Court and expert work is quoted separately. If the scope changes after we start, we confirm the change in writing before doing the extra work.

Can you meet an urgent deadline?

Often, but it depends on how quickly the information can be supplied. Tell us your deadline and we will tell you on the call whether we can meet it. Urgency does not change the fee; it changes how we schedule the work.

How are industrial businesses valued?

How is a manufacturing business valued?

Usually on maintainable earnings: the profit the business can sustain once the owner's role, related-party rent and one-off items are normalised, capitalised at a rate that reflects its risks. That result is then tested against what the plant, working capital and capital spending tell us. Customer concentration, contracts, capacity, management depth and equipment condition all move it. See how we value and our manufacturing business valuation guide.

Do you value machinery separately?

No. We value the business, and the machinery needed to earn its profits is part of that value. A formal plant and machinery valuation, for finance, insurance or a sale of assets, is a separate discipline done by a plant and machinery valuer. If you have one, we can use it as an input, particularly when testing whether the assets support a higher value than the earnings do.

Does plant and equipment increase business value?

Only in particular ways. The CNC machines, presses and forklifts produce the earnings, so a value based on those earnings already includes them, and they are not added again on top. Plant adds value when it is surplus to the business, when its condition means less replacement spending ahead, or when earnings are weak and what the assets would realise sets a floor. Plant due for replacement reduces value. See how plant and equipment affects business value.

How do you treat equipment finance and working capital?

Finance owing on equipment, such as chattel mortgages and hire purchase, is debt and is deducted from enterprise value to reach the value of the shares. Working capital is compared with the normal level the business needs: a shortfall at the valuation date is deducted and an excess can be added. Work in progress on fixed-price jobs gets particular attention, because billing can run well ahead of the work or well behind it.

What if last year was unusually good or bad?

We value on maintainable earnings, not last year's result. A one-off project, a lost customer, a price rise not yet passed through or deferred maintenance are all adjusted for, and we look across several years and the current year to date. If the future will differ materially from the past, for example because a major contract has just started or is about to end, a cash flow forecast may be the better method.

Will you tell me what EBITDA multiple my business is worth?

Not as a rule of thumb. A multiple is the result of the analysis, not an input. It moves with size, margin stability, customer concentration, contracts, management depth, capital spending, equipment condition, cyclicality and intellectual property. Where we use a capitalisation method, the report shows the rate we adopted and why. Our article on manufacturing business valuation multiples explains what moves them.

What do you need from me, and how does the process work?

What financial information do you need?

Usually three years of profit and loss statements and balance sheets, the current year to date, and tax returns where relevant. For an industrial business we also ask for the equipment register with finance balances, revenue by customer, major contracts, a list of employees and their roles, and any lease over the premises. The exact list depends on the industry and the purpose, and we confirm it in the engagement letter. Our valuation readiness check shows where you stand.

Do you need to visit the factory?

Usually not. Most valuations are completed from documents and conversations, including a discussion with the owner or manager about how the operation runs. If the operation or equipment needs to be seen, for example where the condition of specialised plant is central to the value, we say so when scoping and agree any visit and its cost first.

How do I send you documents?

Only through the private upload link on your matter, which you receive once the engagement is accepted. Please do not email documents or send them through this website. Your accountant can upload on your behalf with your authority.

Will I see the report before it is final?

Yes. You receive a draft to check the facts, especially machine numbers and ages, customer shares, lease terms and finance balances. We correct any error of fact before the report is final; the value itself is our opinion and is not negotiated. Once you return a signed representation letter confirming the information you supplied is complete and accurate, the final report is issued through the client portal.

How is my information kept confidential?

Your information stays confidential. Documents, financial information and discussions relating to your valuation are handled confidentially. Documents come only through the private link on your matter, and we can sign a confidentiality undertaking before sensitive documents are shared. If staff or a co-owner should not know about the valuation, tell us and we will deal only with you.

What if our records are not in good shape?

Tell us at the scoping call. Plenty of owner-run industrial businesses keep good operational records and thin financial ones. We can often work from management accounts, tax returns and the equipment register, but gaps can affect the scope, the timing and how firmly the report can state its conclusion, and we will say so before you commit.

Which matters and locations do you cover?

Can you value a minority shareholding?

Yes. A minority interest is often worth less per share than a controlling one, because the holder cannot set dividends, salaries or strategy, and shares in a private company are hard to sell. Whether a discount applies depends on the purpose and on any shareholders' agreement, which sometimes requires a pro rata value with no discount. See shareholder valuations and valuing a minority shareholding.

Can you provide valuations for family law?

Yes. Family law matters are prepared through our dedicated family law practice, Family Law Valuations. A Settlement Valuation is $2,495 + GST and an Expert Report is $4,495 + GST, and its guide to which report you need explains the difference. Our family law business valuation page covers how an industrial business is valued in a property settlement.

Can you value an industrial business anywhere in Australia?

Yes. We work Australia-wide from documents and calls, so there is no need to visit an office, and the fee is set by turnover, not location. Our locations pages cover the main industrial regions we work in.

Can the report be used in court?

Not as it stands. A report prepared for a commercial purpose is not an expert report for a court or tribunal. Expert evidence has to meet the court's own requirements, for example the Federal Court's Expert Evidence Practice Note (GPN-EXPT) and its Harmonised Expert Witness Code of Conduct, so it is a separate engagement with its own scope and fee. See dispute valuations.

Can the valuation be used for tax purposes?

Yes. Valuations are commonly needed for restructures, capital gains tax events and transfers between related parties. The ATO guide Market valuation for tax purposes lists what it expects a valuation report to cover, and our reports address those matters. We do not give tax advice: the dates, assets and concessions involved are for your accountant. See tax and restructuring valuations.

Is the online value estimator a valuation?

No. The value estimator is a quick self-assessment that shows which factors strengthen or weigh on the value of an industrial business. It is not an independent business valuation and should not be relied upon for legal, taxation or transaction purposes.