Key takeaways
Prepare an evidence pack, not just a sale presentation
Reconcile accounts, current results and proposed earnings adjustments before approaching buyers. Trace each material claim to its records and keep management information distinct from audited evidence; attractive presentation alone does not establish sustainable profit.
Document the work and relationships a buyer must replace
List your duties, customer dependence and operating rights, then cost a realistic handover. Do not remove owner wages from earnings without allowing for necessary replacement work or assume every relationship survives your departure.
Separate completed value improvements from hoped-for results
Assess spending against its likely benefit, operating cost and delivery risk. A new manager or sales initiative may help, but an unfinished plan should not be presented as current earnings or an assured increase in value.
Compare sale offers after separating payment conditions
Completion cash, deferred payments, earn-outs, employment and retained liabilities can produce different outcomes despite similar headline prices. Ask advisers to reconcile the actual terms rather than treating business value as your guaranteed net proceeds.
Match the valuation to the reader who will rely on it
Early personal planning and a report for buyer or adviser reliance are different instructions. Confirm the subject, date, intended users and engagement before work begins; protect confidential information and keep valuation, legal and tax advice separate.
Decide what is being offered
Before discussing a price, describe what a buyer would actually acquire. An asset sale may differ materially from a share sale, especially where property, cash, debt or working capital is involved. Identify excluded assets and the owner’s intended handover role so the valuation does not assume a transaction package that is not available.
Make the earnings understandable
Bring together accounts, management results, owner remuneration and explanations for unusual income or expenditure. Support proposed add-backs with records rather than relying on an informal list. Consider whether replacement management, rent adjustments or deferred maintenance would change the earnings a buyer could sustain after the current owner steps away from daily operations.
Find issues before negotiations
Customer dependence, lease expiry, key employee retention and transfer approvals can influence buyer confidence. A valuation can identify how these issues affect the assessment without pretending that every commercial risk has been resolved. Legal, tax and operational preparation remain separate workstreams, and some matters may need specialist advice before the business goes to market.
Signed
A clear valuation conclusion starts with an agreed purpose, relevant evidence and disclosed assumptions. The report identifies the interest valued and explains the reasoning behind its conclusion.
Use the result as a planning tool
The report should explain the valuation basis, assumptions and factors that could change the conclusion. This gives the owner a reference for discussing price expectations with advisers or a broker. A concluded value is not a guaranteed sale price: financing, deal structure, buyer synergies and competing offers can affect the eventual negotiated outcome.
Choose the right next step
Owners seeking a defined valuation instruction can use selling-a-business valuation. A more evidence-focused preparation exercise may call for vendor due diligence. Confirm whether the immediate objective is readiness, price discussion or a transaction-specific report, since each requires a different level of information and analysis.
Reconcile an evidence pack before approaching buyers
Prepare a dated index of the financial statements, tax returns and management results available to support the sale discussion. Ask your accountant to explain differences between these records, including timing adjustments, exceptional transactions and changes in accounting treatment. A buyer should be able to see which period each figure covers rather than being asked to accept a collection of spreadsheets with different cut-off dates.
Create a separate schedule for each proposed earnings adjustment. Record the amount, original ledger entry, reason it might not recur and evidence supporting that conclusion. Owner wages need particular care: removing the owner’s salary without providing for replacement management may overstate the earnings a buyer could maintain. Similarly, irregular repairs can remain necessary operating costs even if they did not occur in the latest year. The goal is a traceable explanation, not the largest possible adjusted profit.
Prepare a handover that can actually happen
Write down what you do in a normal week, including sales, technical work, staff supervision, supplier negotiations and administration. Identify which responsibilities existing employees can absorb and which would require another paid role. Document systems, passwords and operating procedures for authorised transfer, but keep confidential credentials out of any general buyer information pack.
Review customer and supplier arrangements with your advisers. Repeat purchases are useful evidence, but they are not the same as a transferable contract. A relationship built around the departing owner may require an introduction period, new agreement or consent. The valuation should distinguish what exists at its date from hoped-for improvements that have not yet been delivered. A handover plan informs the analysis without guaranteeing that every customer or employee will remain.
Distinguish value improvements from presentation improvements
Tidier records can make the business easier to understand without necessarily changing its underlying value. Sustainable changes to margins, customer retention or owner dependence may affect earnings and risk, while a new brochure alone does not establish a higher conclusion. Record completed improvements and their costs separately from proposed work.
Before delaying a sale to make improvements, compare the expected benefit with the investment required and uncertainty of delivery. For example, hiring a manager may reduce dependence on you but also increase wages before sales or efficiency improve. Assess those effects together. Avoid describing an untested plan as though its projected results already form part of current maintainable earnings.
Compare offers using the actual money and obligations
A headline offer can combine completion cash, deferred payments and amounts conditional on future performance. Ask your lawyer and accountant to separate those components and explain the conditions, security and continuing commitments. Two offers with the same stated total can create different risks and cash outcomes for you.
Keep employment payments, shareholder loans and assets retained by you separate from the price for the business interest. Clarify stock and working-capital adjustments and identify who remains responsible for employee entitlements or warranties. The independent valuation is a reference point for the defined subject; it is not a calculation of after-tax proceeds or a promise that a particular buyer can obtain finance. Final transaction advice remains with your advisers.
Protect confidentiality throughout sale preparation
Organise access to sensitive material in stages with legal advice about confidentiality and permitted use. Initial discussions need not expose customer identities, staff details or commercially sensitive contract terms indiscriminately. Keep a record of what was shared, with whom and when, so different buyers receive consistent explanations and later updates can be traced.
Do not include personal information merely because it appears in the underlying accounts or payroll. Ask advisers what can be redacted without obscuring the financial evidence. A clear, appropriately controlled evidence pack helps serious buyers assess the opportunity while protecting the business if negotiations do not proceed. It does not replace a buyer’s own due diligence or convert management information into audited accounts.
Scope, fees and timing
See our fixed-fee valuation packages and confirm the scope and fee before commissioning work. Confirm the purpose, intended users, information requirements and inclusions in a written engagement before work begins. Calculated Value and Limited Scope delivery is 5–7 business days from complete financial information and a signed engagement. Full Conclusion timing is confirmed individually in the engagement letter. Specialist requirements or changes to the instruction may affect suitability and timing; confirm these before relying on an external deadline.
Sources and further reading
Frequently asked questions
Should I get the business ready before commissioning a sale valuation?
Gather current accounts, ownership details and an outline of the sale package first. You do not need to resolve every issue before contacting IBV, but identifying missing evidence helps us agree a useful scope. Completed improvements and future plans must be described separately.
What is the difference between sale preparation and a selling valuation?
Sale preparation organises records, transfer questions and handover decisions. A selling valuation reaches a supported value for a defined subject and date. Vendor due diligence tests selected evidence for buyer scrutiny. Discuss which output you actually need before commissioning work.
Can I add all my salary back to the business profit?
No. A buyer may need to pay someone to perform your management, sales or technical duties. Provide payroll records and a description of your work so any adjustment reflects a supported replacement cost, rather than assuming your effort is free.
Will a better information pack automatically increase value?
No. Better records can make earnings and risks easier to understand, but presentation alone does not establish higher sustainable income. Improvements must have evidence and be assessed alongside their costs, transition risks and ongoing operating requirements.
Should I invest in a manager before putting the business on the market?
Compare the cost and likely operating effect before committing. A manager may reduce owner dependence but increase wages, and hoped-for sales growth may not arrive immediately. The valuation assesses conditions supported at its date, not a guaranteed return from proposed spending.
Does the valuation equal the cash I will receive at settlement?
No. Debt, retained assets, working-capital adjustments, deferred payments, transaction costs and tax can change the proceeds. Ask your lawyer and accountant to model the actual offer separately from the business value.
Can I share customer and staff records with every interested buyer?
Do not assume that is appropriate. Obtain advice about confidentiality, privacy, redactions and staged access. Keep track of what each buyer receives and distinguish evidence needed to assess earnings from unnecessary personal or commercially sensitive information.
What if the lease or a customer contract cannot transfer?
Provide the terms and ask your lawyer to assess consent and renewal requirements. The valuation must reflect the operating rights a buyer can actually obtain, with uncertain transfers disclosed. A valuable trading history does not remove contractual restrictions.
Which engagement supports early sale planning versus buyer reliance?
Calculated Value is fixed $2,450 + GST for your own planning only, with no reliance by buyers or other parties. Limited Scope Conclusion of Value is fixed $4,950 + GST and is the common transaction engagement. Tax, family law, shareholder changes and restructures require at least Limited Scope. Full Conclusion is quoted; suitability is confirmed before signing.
When should I arrange the valuation before a planned sale launch?
Allow time to reconcile evidence and obtain adviser instructions before committing to a marketing date. Calculated Value and Limited Scope delivery is 5–7 business days after complete information and signed engagement. Full Conclusion timing is agreed individually. Payment is due on signing.
A clear, independent view of value — with the evidence behind it.
- Understand the conclusion — and what drives value.
- Gain an independent perspective. Move forward with confidence.
- Benchmark your business against industry performance.
- Identify strengths, risks and opportunities through SWOT analysis.
WHAT YOU GET IN A LIMITED SCOPE VALUATION REPORT
Inside your IBV™ report
Executive Summary
Conclusion of value · Method selected · Valuer qualifications
Detailed Report
Maintainable earnings · Cap rate / multiple · Premise of value
The Evidence Pack
SWOT analysis · Top Performers Report · RAVDA score
APES 225 voluntarily aligned. Report depth and supporting analysis follow your agreed package and engagement scope.
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