What Is My Business Actually Worth in 2026?
Most Australian business owners have a number in their head — and it is usually either well above or well below what a buyer will pay. Business value in 2026 comes down to sustainable earnings, the multiple the market applies to them, and the risk a buyer sees in the business without you. Here is how mid-market valuation actually works, and what is moving the numbers this year.
How mid-market businesses are valued
For most privately owned businesses in the $1 million to $200 million range, value is assessed using an earnings-based approach: a maintainable level of profit multiplied by an appropriate multiple. The most common methods are:
- Capitalisation of earnings — normalised EBITDA (or, for smaller firms, seller's discretionary earnings) multiplied by a market multiple. This is the workhorse method for the mid-market.
- Discounted cash flow (DCF) — projecting future cash flows and discounting them to today's value. Useful for businesses with strong forecastable growth.
- Asset-based and market-comparable — used as cross-checks, particularly for asset-heavy businesses or where comparable sale data exists.
Key takeaway: Value = maintainable earnings × multiple. You influence the first number by running a profitable, well-documented business, and the second by reducing the risk a buyer sees in it.
Getting the earnings right: normalisation and add-backs
Before any multiple is applied, earnings are "normalised" to reflect the true, ongoing profitability of the business. This means adjusting for one-off costs, non-commercial owner salaries, private expenses run through the business, and revenue or costs that will not continue after a sale. Done well, normalisation can materially lift the earnings figure the multiple is applied to — but every add-back must be genuine and defensible, because buyers and their advisors will scrutinise each one during due diligence.
What multiple will my business attract?
There is no single number, but some broad patterns hold. Smaller owner-dependent businesses commonly trade in the region of two to four times earnings. Established lower mid-market businesses with solid systems and management often sit around four to six times EBITDA, and larger, high-quality or strategically attractive businesses can command materially more. Sector matters too: technology, healthcare and essential-service businesses typically attract higher multiples than labour-intensive or highly cyclical industries.
What pushes your multiple up
- Recurring or contracted revenue with low churn
- A management team that runs the business without the owner
- A diversified customer base — no client above roughly 10% of sales
- Consistent margins and clean, reliable financial records
- A credible growth story and a defensible market position
The mirror image is just as important. Heavy owner dependence, customer concentration, messy financials and flat growth all drag the multiple down — often more than owners expect. Two businesses with identical profit can sell for very different prices purely because of the risk profile a buyer inherits.
What the 2026 market is telling us
The mid-market backdrop in 2026 is encouraging for well-prepared sellers. Buyer appetite is strong — the majority of dealmakers plan to increase their mid-market investment this year, and most are now buying opportunistically as good assets come to market. Encouragingly, the valuation gap between buyers and sellers has been narrowing, with fewer deals collapsing over price than a year ago. The consistent message from acquirers is that they will stretch for the right asset, but continue to walk away from businesses they consider overpriced or under-prepared.
Worked example: A services business generates $1.5 million in normalised EBITDA. At a three-times multiple — reflecting heavy owner reliance — it is worth around $4.5 million. Reduce that owner dependence, lock in recurring contracts and clean up the reporting, and the same earnings at a five-times multiple are worth $7.5 million. The uplift comes from de-risking the business, not from working harder in it.
Why a formal valuation is worth it
A professional valuation does more than produce a number. It tells you where value is being lost, what a buyer will question, and what to fix before you go to market. With announced CGT changes making a documented business value at 1 July 2027 increasingly important, a current, defensible valuation is fast becoming an essential planning tool — not just something you commission when a sale is imminent.
Frequently asked questions
How is a business valued in Australia?
Most mid-market businesses are valued by multiplying normalised maintainable earnings (usually EBITDA) by a market multiple, cross-checked against discounted cash flow, asset values and comparable sales.
What is a typical EBITDA multiple for a mid-market business?
It varies by size, sector and risk, but lower mid-market businesses commonly trade between roughly three and six times EBITDA, with stronger, less owner-dependent businesses at the higher end and beyond.
How can I increase the value of my business before selling?
Reduce reliance on the owner, secure recurring revenue, diversify your customer base, tidy your financial records and build a credible growth story. Each lowers buyer risk and supports a higher multiple.
Need Help?
This article provides general information and should not be considered financial, legal or tax advice. For personalised guidance on valuing, selling, buying or planning the succession of your business, please contact the Quinn M&A advisory team by calling 1300 QUINNS (1300 784 667) or +61 2 9223 9166, or submit an online enquiry form to arrange a confidential discussion.
