How this calculator works
The overwhelming majority of Australian private business sales are priced on a multiple of normalised EBITDA. A buyer asks two questions: how much profit will this business reliably produce for me, and how risky is that profit? The multiple is where the risk lives.
This calculator applies indicative multiple ranges by industry — for example, hospitality businesses typically transact between roughly 1.5× and 2.5× EBITDA, while established manufacturers can reach 3× to 5× — then adjusts the range for two of the biggest pricing factors in real deals:
- Owner dependence. A business that runs without its owner sells in the upper half of its industry range; a business that is its owner sells at a discount, if it sells at all.
- Size. Below about $200k EBITDA, buyers apply compressed multiples. Above about $1m EBITDA, businesses attract professional and private-equity buyers who pay premiums.
Frequently asked questions
How is a small business valued in Australia?
Most Australian SMEs are valued on an earnings multiple: normalised EBITDA multiplied by an industry multiple, typically between 1.5× and 5×. Asset-heavy or loss-making businesses may instead be valued on net assets, and fast-growing software businesses on revenue multiples — but for a profitable trading business, EBITDA multiples are the market standard.
What is "normalised" EBITDA?
Your accounting profit, adjusted to show what a new owner would actually earn. Add back interest, tax, depreciation, amortisation, one-off costs, and any above-market owner salary or personal expenses — then deduct a fair market salary for the role you perform. Buyers and brokers call these adjustments "add-backs", and they're scrutinised heavily in due diligence.
Why does owner dependence matter so much?
Because the buyer can't buy you. If relationships, pricing knowledge and delivery capability all sit in the owner's head, the earnings walk out the door at settlement. This is the most common reason otherwise-profitable businesses fail to sell — and the most fixable one, given a two-to-three-year runway before exit.
Is this a formal valuation I can rely on?
No. It's an indicative range for planning conversations only. Formal valuations consider your actual financial statements, contracts, lease terms, market conditions and comparable transactions — and are the only thing you should rely on for a sale, purchase, tax event or dispute.
I also own my business premises — what should I do differently?
Value them separately, and decide the property question before you go to market with the business. Whether you sell the freehold with the business, keep it and grant the buyer a market lease, or stage the two sales has major price, tax and retirement-income consequences. Our Dual-Asset Exit Calculator models the main paths side by side.