Independent Valuation · Licensed NSW Business Agent · LINK Business
Business Valuation
Sydney
A Sydney business is usually valued at a multiple of normalised earnings. Owner-operated businesses use SDE at roughly 1.5 to 4.0 times. Businesses with a management layer use EBITDA at 2.5 to 7.0 times, depending on sector and risk. Use the calculator below for an indicative range.
Independent valuations using EBITDA and SDE multiples benchmarked against current NSW transaction data — not generic online calculators.
What Is It
What is a business valuation in Sydney?
A business valuation is an independent assessment of what your business is worth to a buyer in the current market. It is not the same as your business's book value, the amount you've invested, or what you need to retire. It is what a qualified buyer will pay — based on earnings, risk, and comparable transactions.
In Sydney's SME market, most businesses are valued using an earnings multiple — either EBITDA (for businesses with a management layer) or SDE (for owner-operated businesses). For SDE, the normalised earnings figure adds back the working owner's compensation, superannuation, and legitimate personal or discretionary expenses to arrive at the earnings available to a working owner-buyer. For EBITDA, normalisation adjusts owner remuneration to a market-rate replacement management cost — it does not add back all owner pay — and excludes genuine one-off items that are documented and assessed on their merits.
An independent valuation from a licensed broker gives you a defensible asking price, helps you understand what buyers will scrutinise during due diligence, and identifies the specific factors that are suppressing or supporting your multiple before you go to market.
Worked Example
How much is my business worth to sell?
The starting point is normalised earnings — the true underlying profit adjusted to reflect the business's sustainable earning capacity. For SDE (used for owner-operated businesses), this means adding back the working owner's salary, superannuation, and personal or discretionary expenses run through the business. For EBITDA (used where a management layer exists), owner remuneration is adjusted to a market-rate replacement management cost rather than added back entirely. In both cases, genuine one-off costs — such as a fit-out or a non-recurring legal dispute — may be excluded where they are documented and assessed individually. This adjusted figure is what buyers and brokers use as the earnings base.
A multiple is then applied based on sector, size, risk profile, and current buyer demand. The result is an indicative value range — not a fixed price, but a realistic bracket for what a qualified buyer would pay in the current market.
Illustration only — not a real transaction
This is a simplified illustration of the normalisation process. Actual valuations depend on sector, lease quality, customer concentration, growth trajectory, and current buyer demand. Use the free calculator for an indicative range based on your own figures.
Risk Factors
What lowers a multiple
Buyers apply a risk discount when they see these factors. Each one can push the achieved multiple toward the bottom of the sector range — or cause a buyer to walk away entirely.
Owner dependence
If the business cannot operate without the owner — key relationships, technical skills, or daily decision-making — buyers discount heavily or structure an earnout to keep the seller involved post-sale. A documented management layer and written procedures reduce this risk.
Customer concentration
A single customer representing more than 20–30% of revenue is a significant red flag. Buyers price in the risk that the customer leaves after the sale. Diversified revenue across multiple customers supports the upper end of the multiple range.
Short or expiring lease
For premises-dependent businesses, a lease with less than 3 years remaining (including options) is a deal risk. Buyers need certainty of tenure. A short lease either kills the deal or forces a price reduction to reflect the relocation risk.
Poor or inconsistent financial records
Businesses with cash sales, mixed personal and business expenses, or financials that do not reconcile with tax returns are heavily discounted. Buyers and their accountants cannot verify the earnings, so they assume the worst. Three years of clean, accountant-prepared financials is the baseline.
Falling or flat earnings
A declining revenue or EBITDA trend over the past two to three years forces buyers to apply a risk discount — they are buying a business that may be worth less next year than it is today. A rising trend supports the upper end of the range.
Methods
How Sydney businesses are valued
EBITDA Multiple
2.5× – 7.0×Best for: Businesses with $500K+ EBITDA and a management layer
Earnings Before Interest, Tax, Depreciation and Amortisation × a sector-specific multiple. The multiple reflects risk, growth, and buyer demand in your sector.
SDE Multiple
1.5× – 4.0×Best for: Owner-operated businesses under ~$500K EBITDA
Seller's Discretionary Earnings — net profit plus owner's salary, super, and personal expenses added back — multiplied by a sector multiple. Reflects what the business is worth to a working owner-buyer.
Revenue Multiple
0.5× – 3.0×Best for: SaaS, subscription, or high-growth businesses
Annual recurring revenue × a multiple. Used when earnings are low or negative but the revenue base is sticky and scalable. Rare in traditional SME sales.
Asset-Based Valuation
Net asset valueBest for: Asset-heavy businesses or those with low profitability
Net tangible assets (plant, equipment, stock, debtors less liabilities) as the floor value. Often used as a sanity check alongside earnings multiples.
Free Tool
Get an indicative value range in 60 seconds
Enter your EBITDA or SDE, select your sector, and the calculator applies current NSW market multiples to give you a realistic range — no registration, no obligation.
Market Data
Sydney business valuation multiples by sector
Current indicative ranges based on completed NSW transactions. The actual multiple achieved depends on the specific value drivers and risks in your business.
| Sector | Basis | Low | High |
|---|---|---|---|
| Childcare / Early Education | EBITDA | 4.0× | 7.0× |
| Allied Health (Multi-Site) | EBITDA | 3.5× | 6.0× |
| IT & Technology Services | EBITDA | 3.0× | 6.0× |
| Logistics & 3PL | EBITDA | 3.0× | 5.0× |
| Warehousing & Storage | EBITDA | 3.0× | 5.0× |
| Dental Practice | EBITDA | 3.0× | 5.0× |
| Manufacturing | EBITDA | 2.5× | 4.5× |
| Engineering & Industrial Services | EBITDA | 2.5× | 4.5× |
| Professional Services | EBITDA | 2.5× | 4.5× |
| Transport & Freight | EBITDA | 2.5× | 4.5× |
| Wholesale & Import/Distribution | EBITDA | 2.0× | 4.0× |
| Construction | EBITDA | 2.0× | 3.5× |
| Restaurant | SDE | 1.5× | 3.0× |
| Café / Coffee Shop | SDE | 1.5× | 2.5× |
Indicative ranges only. Actual multiples depend on business-specific factors. Last updated June 2026. View full multiples table →
Value Drivers
What drives — and reduces — your business value
Revenue quality
Recurring, contracted revenue commands a higher multiple than project-based or one-off revenue. Diversified customer base (no single customer >20% of revenue) is critical.
Owner dependency
If the business cannot operate without the owner, buyers discount heavily. A documented management layer, trained staff, and written SOPs all reduce this risk.
Lease quality
A long, transferable lease (5+ years remaining) is a major value driver for premises-dependent businesses. Short or expiring leases are one of the most common deal-killers.
Financial documentation
Three years of clean, accountant-prepared financials with consistent add-backs. Businesses with cash sales, mixed personal/business expenses, or inconsistent records are heavily discounted.
Growth trajectory
Revenue and EBITDA trending upward over 3 years supports the upper end of the multiple range. Declining or flat revenue forces buyers to apply a risk discount.
Customer concentration
A single customer representing more than 30% of revenue is a significant red flag. Buyers will either reduce the price or structure an earnout to protect against customer loss.
How It Works
How the valuation process works
Confidential conversation
A 30-minute call to understand the business — sector, revenue, EBITDA, lease, staff, and your timeline. No documents required at this stage.
Financial document review
Three years of profit and loss statements, the most recent balance sheet, and a schedule of add-backs. All documents are treated as strictly confidential.
Normalised earnings calculation
For SDE, the working owner's salary, superannuation, and legitimate personal or discretionary expenses are added back to arrive at the earnings available to a working owner-buyer. For EBITDA, normalised earnings retain a market-rate salary and full employment costs (including super and on-costs) for replacement management — owner remuneration is adjusted to that market rate, not added back in full. Genuine one-off items are identified, documented, and assessed individually.
Multiple selection
The appropriate multiple range is selected based on sector benchmarks, business-specific value drivers, and current buyer demand in the Sydney market.
Written valuation report
A written report with the indicative value range, the methodology used, and the key factors supporting or suppressing the multiple. Delivered within 3–5 business days.
Documents needed for a valuation
- 3 years of accountant-prepared profit & loss statements
- Most recent balance sheet
- Schedule of normalisation adjustments (owner remuneration, personal/discretionary expenses, one-off items — with documentation)
- Current lease agreement (or lease summary)
- Plant and equipment list (for asset-heavy businesses)
Your Valuer
Independent valuations from a licensed NSW broker
Richard Matthews is a licensed NSW business agent operating through LINK Business — Australia's largest business brokerage network. He provides independent business valuations for Sydney SME owners who are considering a sale, planning an exit, or simply want to understand what their business is worth in the current market.
Unlike online calculators or generic valuation tools, Richard's valuations are based on actual completed transactions in NSW — real multiples achieved by real businesses in your sector. The valuation includes a written report with a defensible asking price range and a clear explanation of the factors driving the number.
All valuations are strictly confidential. No information is shared with third parties without your written consent.
Free Valuation Tools
Start with the free calculator
Enter your EBITDA or SDE and select your sector to get an indicative value range in under 60 seconds. No registration required.
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