A business broker appraisal estimates the price a business could achieve on the market, usually as part of preparing to sell it. An independent valuation is an opinion of value from someone with no role in the sale, showing the earnings, method, evidence and assumptions. Some owners use a broker to sell and a valuation to check the number.
What is the short answer?
A broker appraisal estimates the price your business could achieve on the market, usually as a first step towards selling it. An independent valuation is an opinion of value from someone with no role in the sale, with the working shown. They answer related but different questions, and many owners use both.
What is a broker appraisal?
A broker appraisal is a broker's view of the price your business is likely to achieve if it is marketed for sale. It draws on the broker's knowledge of current buyers, recent deals and what similar businesses are listed for.
That market knowledge is real and useful. A good broker knows what buyers in your area are looking for and how they respond to different prices. The Australian Government's Sell your business page says brokers help buy and sell businesses, and can advise on profitability and market trends for your industry. It also suggests checking a broker's professional credentials before using their services.
The appraisal is often prepared as part of a broker's pitch to sell your business, so its purpose is to set a price for marketing. The same government page notes that comparing your business with similar ones for sale is not a formal valuation. It can still give you an idea of your market price.
What is an independent valuation?
An independent valuation is a reasoned opinion of what a business is worth at a set date, prepared by someone with no stake in what happens next. It shows how the figure was reached.
A valuer adjusts the earnings for one-off items and the real cost of the owner's work. Then the valuer chooses a method, tests the result, and sets out the assumptions and limits. The valuer does not sell the business, find buyers or negotiate. At Valuo, the fee is fixed before the work starts and never depends on the value concluded.
How do they compare?
The two are built for different jobs, so the differences are in purpose and process rather than quality.
| Broker appraisal | Independent valuation | |
|---|---|---|
| Main purpose | Set a price to take the business to market | Give a reasoned opinion of value at a date |
| Who prepares it | A broker who may be engaged to sell the business | A valuer with no role in the sale |
| Who it serves | An owner deciding whether, and at what price, to list | The owner, and other parties who may read it, depending on the report |
| Basis | Market knowledge, buyer demand, recent listings and deals | Adjusted earnings, a stated method, evidence and cross-checks |
| What you receive | Often a price range or listing recommendation | A report setting out method, assumptions and limitations |
| Formal uses such as tax or lending | Not designed for them | Possible with a report scoped for that purpose |
| Finds buyers and runs the sale | Yes | No |
Why does independence matter?
Independence matters when you need a figure you can rely on without wondering whose interests shaped it. That is not a criticism of brokers: their job is to sell your business, and an appraisal is a natural part of that job.
An independent valuer has a different job. The valuer has no stake in whether or when you sell. So the valuer can tell you plainly if the earnings support the price you hope for, or if risks like one large customer are holding the value back. That independence is also why other parties, such as a co-owner, a buyer's adviser or a lender, may prefer an independent report to an appraisal.
When might an owner get both?
Owners preparing to sell often find the two work well together. The valuation tells you what the business is worth on its earnings and risks, and the broker tells you how the market is likely to respond.
Common situations include:
- Before choosing a broker. A valuation gives you your own reference point when comparing appraisals.
- When appraisals vary widely. A documented figure helps you understand why.
- When setting a price. Knowing what supports your number helps when buyers push back.
- When a co-owner, family member or adviser needs to agree. An independent report gives everyone the same reasoning to look at.
Our guide to business valuation and sale price explains why the final price can still differ from either figure, and valuing a business to sell covers preparing for a sale.
How can Valuo help?
Valuo offers two reports at fixed fees set by annual revenue. The Business Value Report, from $995 + GST, is a streamlined assessment for your own decisions, such as early sale preparation. It is reviewed by a valuer but is not signed and is not for third parties. The Professional Valuation Report, from $1,495 + GST, is a full independent valuation signed by the valuer responsible, suited to a sale or purchase and to situations where a buyer or another party will read it. Businesses with revenue of $10 million or more receive a fixed fee quoted before any work starts.
- Get your fixed fee
- See every fee on the pricing page
If a sale involves a partner or shareholder buyout, a restructure or a related-party transfer, Oliver Group scopes it individually. Healthcare practices are valued by Medival. For separation, use our dedicated family law practice, Family Law Valuations. Tax and legal questions about a sale are for your accountant or lawyer.
Questions
Is a broker appraisal the same as a valuation?
Not quite. A broker appraisal is an estimate of the price a business might achieve when marketed for sale, drawing on the broker's knowledge of buyers and recent deals. An independent valuation is a documented opinion of value prepared by someone with no role in the sale.
Should I get both a broker appraisal and a valuation?
Some owners find both useful. The valuation tells you what the earnings and risks support, and the broker tells you how the market is likely to respond. If the two figures differ, the reasons are often worth understanding before you set a price.
Can I use a broker appraisal for tax or a bank?
A broker appraisal is prepared to help sell a business, not for formal purposes. For tax, lending or another party's reliance, an independent valuation scoped to that purpose is usually more appropriate. The ATO or the lender decides for itself what it will accept, so check with them first.
Does an independent valuation replace a broker?
No. A valuation gives you a reasoned figure, but it does not find buyers, market the business or negotiate the sale. Those are what a broker does.
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.