Value your business well before you plan to leave. Start with a baseline valuation, decide whether you will hand over to family, sell to staff or sell to an outside buyer, then work on what lifts value, such as less reliance on you. Review the value every year or two, and ask your accountant about tax and super.
When should I value my business for retirement?
Start several years before you plan to leave. An early valuation gives you a baseline and time to improve the business before you hand it over.
The Australian Government's guide to developing a succession plan warns against leaving succession planning to the last minute. It also suggests working out what your business is worth on a regular basis, because the value may change by the time you leave.
A first valuation answers two questions: what is the business worth today, and what is holding that value back?
Who could take over my business?
The main options are a family member, an employee or management team, a business partner, or an outside buyer. Each option changes how the price is set and paid.
| Option | What usually matters | Things to plan for |
|---|---|---|
| Family handover | Fairness between family members, and whether the successor has the skills and wants the role | The price may be lower than market, paid over time, or partly a gift |
| Sale to staff or management | Whether they can raise the money | Payment over time or finance, and a handover period |
| Sale to a partner or co-owner | What your agreement says about price and method | The terms of any shareholder or partnership agreement |
| Outside sale | What buyers will pay for reliable profit | Records, owner dependence and timing the market |
The business.gov.au guide also suggests checking that a successor has the right skills, wants the business, and can afford to buy you out.
Does the value change depending on who takes over?
The business itself can be valued on the same basis, but the price agreed can differ. A family member may pay less, or pay over time. An outside buyer will usually test every number.
A valuation gives everyone the same starting point. That helps keep a family or staff handover fair and clear.
If you sell below market value to family or a related party, there may be tax effects. Ask your accountant before you agree a price.
What lifts the value of a business over time?
Value usually rises when profit is reliable and the business can run without you. Those changes take time, which is why early planning matters.
Common areas to work on:
- Less reliance on you: hand key customers, suppliers and decisions to staff.
- Written processes: document how the business runs so someone else can step in.
- Clean records: keep accounts that agree with your tax returns, with private costs kept out.
- Customer spread: reduce dependence on one or two big customers.
- Secure arrangements: keep leases, contracts and key staff on stable terms.
- Steady profit: a consistent record over several years is easier to rely on than one strong year.
Your accountant can help you plan these changes alongside your personal goals.
How often should I review the value?
Review the value every year or two, and again after any big change. That way you can see whether your plan is working and adjust your timing.
Big changes include losing or winning a major customer, a new lease, a change in profit, or a change in your health or plans. The business.gov.au guide recommends reviewing your succession plan regularly so you are ready if you need to leave sooner than expected.
Keep each valuation on the same basis so you can compare like with like.
What about tax and super when I retire?
Tax and superannuation can make a big difference to what you keep from a sale or handover. Capital gains tax and possible small business concessions may apply, depending on your circumstances.
These rules are detailed and change over time. Talk to your accountant before you set a price, choose a structure or sign anything. A valuation can give your accountant a reasoned figure to work with, but it is not tax advice.
Which Valuo report fits succession planning?
For your own planning, the Business Value Report fits. If someone else will rely on the figure, such as a successor, partner or buyer, choose the Professional Valuation Report, which is signed by the valuer responsible.
| Annual revenue | Business Value Report | Professional Valuation Report |
|---|---|---|
| Under $1 million | $995 + GST | $1,495 + GST |
| $1 million to under $2 million | $1,495 + GST | $1,995 + GST |
| $2 million to under $5 million | $2,495 + GST | $2,995 + GST |
| $5 million to under $10 million | $3,495 + GST | $3,995 + GST |
For revenue of $10 million or more, you receive a fixed fee quoted before any work starts.
What should I do next?
Get a baseline now, then review it as your plan takes shape.
- Get your fixed fee
- See all pricing and how it works
If your succession involves a shareholder buyout, a restructure, a related-party transfer or tax and CGT work, talk to Oliver Group, the Valuo company that handles them. For a healthcare practice, see Medival. If a separation is involved, our dedicated family law practice, Family Law Valuations, can help.
Questions
How early should I value my business before retiring?
Several years ahead is sensible. An early valuation gives you a baseline and time to improve the business before you hand it over. A late valuation leaves little room to fix what is holding value back.
Is the value different if I hand the business to family?
The business itself may be valued the same way, but the deal can be very different. A family handover may involve a lower price, payment over time or a gift, and those choices can have tax and legal effects. Talk to your accountant and lawyer before you decide.
Which Valuo report suits succession planning?
For your own planning, the Business Value Report fits. If a family member, staff member, partner or buyer will rely on the figure, or the handover involves a formal agreement, choose the Professional Valuation Report.
Are there tax or super rules when I sell my business to retire?
There may be, including capital gains tax and possible small business concessions. These depend on your circumstances and change over time, so ask your accountant before you set a price or sign anything.
What if the succession involves buying out a partner or a restructure?
Shareholder buyouts, restructures and related-party transfers need individually scoped work. Oliver Group, a Valuo company, handles them with a fixed fee quoted before any work starts.
General educational information, not advice. Examples are hypothetical and do not value a real business. The right treatment depends on the purpose, the evidence and the agreed scope.