Question 1

What is a business appraisal?

Accepted Answer

A business appraisal is the process of determining the current market value of your business based on its financial performance, risk profile, industry conditions, and comparable sales. It provides an objective estimate of what a willing buyer would realistically pay in today’s market.

At LINK, our appraisal methodology goes beyond a simple calculation. We analyse your historical and current trading performance, assess maintainable earnings, review cost structures, and consider key value drivers such as systems, staff, customer base, and growth potential. We also factor in market demand and recent transactions within your sector to ensure the appraisal reflects real-world buyer behaviour.

The outcome is a clear, data-backed appraisal range and recommended pricing strategy, giving you confidence in how to position your business for sale. Whether you're ready to go to market or simply exploring your options, a professional appraisal is the first step toward a successful exit.

Question 2

What’s the difference between a business valuation and an appraisal?

Accepted Answer

A business valuation is typically prepared by an accountant or certified valuer and follows formal methodologies and standards. It is often required for legal, tax, or compliance purposes, such as financial reporting, shareholder matters, or estate planning. Valuations are generally more focused on the underlying equity of a business, including its assets, liabilities, and overall financial position, providing a structured and technically robust assessment.

A business appraisal, on the other hand, is a market-oriented assessment used when considering the sale of a business. It focuses more on goodwill and financial performance, particularly maintainable earnings, and what a buyer is willing to pay in the current market. It takes into account real buyer demand, comparable sales, industry conditions, and deal dynamics.

Both approaches are valuable in their own right. If you require a formal, compliant report for legal or accounting purposes, a valuation is the appropriate path. If your intention is to sell your business, an appraisal provides a more practical and relevant guide to pricing and positioning.

At LINK, our appraisals are informed by real-time market activity. As business brokers, we are actively engaged with buyers, track comparable transactions, and assess how the market is responding to opportunities like yours. This allows us to provide a realistic price range and a strategy aligned with current market conditions.

Question 3

What are business multipliers and how do they work?

Accepted Answer

Business multipliers (or multiples) are used to estimate the value of a business by applying a multiple to its normalised EBITDA (maintainable earnings).

While you may see mixed ranges online, in the Australian market most businesses typically sell between 1x and 4x EBITDA. There are exceptions, but the vast majority of small to mid-sized businesses fall within this range.

The appropriate multiple depends on a number of factors, including the industry and level of market demand, the size and scale of the business, its growth potential and consistency of earnings, the level of owner involvement, the strength of its systems, staff and processes, and the level of customer concentration or overall risk profile. In simple terms, the more stable, transferable and low-risk a business is, the higher the multiple it can achieve.

It’s also important to maintain a balanced perspective. Buyers are ultimately investing for a return, and it is not always realistic to expect them to pay for several years of future performance based on a single strong year of results. Putting yourself in the buyer’s position is often a useful exercise when considering value.

At LINK, we take a fair and market-driven approach, combining financial analysis with real buyer behaviour and comparable sales to determine a multiple that reflects both value and current market conditions.

Question 4

What documents are required for a business appraisal?

Accepted Answer

To complete a business appraisal, we require a combination of financial information and operational insight to accurately assess both performance and transferability.

Ideally, this includes your financial statements and EOFY reports for the past 2 to 3 years, and up to date management accounts where available. A balance sheet is also important, as it provides visibility on the overall financial position of the business.

In addition to financials, we require a brief overview of how the business operates. This includes the owner’s level of involvement, staff structure, and whether there is a general manager or key team members in place. Understanding how reliant the business is on the owner helps assess its scalability and attractiveness to buyers.

We also look at the systems and processes in place, client or supply agreements, as well as any other relevant information that supports the day to day operation and continuity of the business. The more complete and accurate the information provided, the more precise and meaningful the appraisal will be.

Question 5

How much does it cost to receive a business appraisal?

Accepted Answer

The cost of a business appraisal can vary depending on the professional and their approach. While some brokers or advisors may charge a fee for this service, I offer a detailed business appraisal on a complementary basis as part of the initial stage of working together.

Personally, I view this as an opportunity to build a relationship with my clients, while also assessing whether I can effectively assist with the sale of their business and provide honest, market-based feedback.

If you would like to receive a comprehensive business appraisal report, please feel free to complete one of the forms on my website or contact me directly at matteo.melis@linkbusiness.com.au.

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The valuation methodologies used by LINK are industry specific, and are based on ‘real world’ market and sale information.

What is a business appraisal?

What’s the difference between a business valuation and an appraisal?

What are business multipliers and how do they work?

What documents are required for a business appraisal?

How much does it cost to receive a business appraisal?