A Valuation isn’t just about the bottom line.
When it comes time to sell, most owners assume it’s all about profit. More dollars = higher price, right?
Not quite.
Yes, profitability matters but it’s only one piece of the puzzle. In reality, buyers (and professional valuers) are looking at a broader picture. And if you don’t know what they’re really evaluating, you could be leaving money on the table or setting unrealistic expectations.
Let’s break down the key factors that shape what your business is actually worth.
1. Profitability (but not just the number)
Yes, buyers want to see profit but they care just as much how you make it. Are your margins consistent? Are your expenses well-managed? Is profit tied to a seasonal boom or a reliable stream of repeat customers?
Reliable, stable, well-earned profit will always perform better than a business with boom-or-bust volatility.
2. Risk Profile
Put simply: the riskier the business, the lower the price buyers are willing to pay.
Risk comes in many flavours, heavy reliance on one major client, volatile supply chains, inconsistent financials, unclear compliance, or even future regulatory shifts.
Low-risk businesses often get higher valuation multiples, because buyers trust the income will continue without nasty surprises.
3. Owner Dependence
If the business is you, that’s a problem. A buyer wants to step into a business that doesn’t fall apart when you leave.
Can the team run things without you? Are your systems documented? Is your knowledge trapped in your head or spread across clear processes?
Reducing your personal involvement can dramatically increase value and buyer confidence.
4. Revenue Trends
Buyers aren’t just looking at today; they’re looking at the trajectory.
Consistent, upward-trending revenue suggests stability and growth potential. Spiky, erratic, or declining revenue tells a different story, one that needs explaining (or fixing).
Even if your last year was solid, buyers will want to see that it wasn’t a fluke.
5. Operational Systems
A well-oiled business that runs on systems, not just sweat, is worth more.
If you’ve built clear workflows, delegated decision-making, and automated what you can you’re not just running a business. You’re building a machine someone else can take over.
And that’s what buyers want to buy.
So how do you actually improve your value?
Start by assessing where you stand across the factors above. Fix the weak spots. Systematise. Delegate. Document. Improve stability.
Getting a valuation from a specialist can help clarify where your value currently sits and what you can improve before you go to market.
Need help figuring out what’s driving (or dragging down) your business value?
We offer free, no-pressure chats to help you understand your current position and what’s possible.