How our free market appraisal works

In short: the market appraisal takes what your business earns in its newest complete year, applies an earnings multiple for your industry, takes account of how large and how dependable those earnings are, and gives you a range rather than a single number. This page explains each of those steps in plain words.

By the bizflip team · Last reviewed 3 October 2026

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The method, step by step

  1. Earnings first: PEBITDA

    The appraisal starts from what the business earns for its owner, not from turnover. In Australia that is usually PEBITDA — proprietor’s earnings before interest, tax, depreciation and amortisation. Your own salary and benefits, one-off costs and anything that is not part of trading are added back, because a buyer takes over the business, not your pay arrangements. The tool names the earnings basis it used.

  2. Your newest complete year

    Australia’s financial year runs 1 July to 30 June. The appraisal anchors on your newest complete financial year and names the year it used. A year that was out of the ordinary is worth explaining in your notes — a buyer will ask about it anyway.

  3. An earnings multiple for your industry

    Small businesses are commonly priced as a multiple of their earnings. The multiple differs from one industry to another, because buyers see different risks and prospects in different trades, and the tool applies one for the industry you choose. This page describes the method; it does not list the multiples. Where our guides quote industry ranges, they name the published source each one comes from.

  4. Size and dependability

    Two businesses in the same industry with the same earnings do not always sell for the same price. Buyers generally pay more for earnings that are larger and more dependable, and less for earnings that are small or uncertain. The tool takes account of this from the answers you give about the business.

  5. A range, not one number

    The result is a low-to-high range. Reasonable buyers can pay different prices for the same business, and a single figure would suggest a precision that no automated calculation has. Treat the range as the place a conversation starts.

What the tool works from

The figures and answers you enter: your revenue and earnings for the years you have, what you add back, your industry, and how the business runs. The result is only as good as those figures. The tool does not audit them — a buyer’s adviser will, so enter what you can support.

An appraisal, not an APES 225 valuation

What the tool produces is a market appraisal. A business valuation is a formal engagement by a qualified practitioner under APES 225 Valuation Services, and it is the document a bank, the ATO or a court will expect.

It does not work out your tax, including whether the small business CGT concessions apply to you.

The Australian valuation page explains where that line falls, and the notice at the foot of this page sets out what the calculation is and is not.

Further reading

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