SOLD! Ryder Family passes the reigns at Rydweld

team@bolstar.com (Trent Yesberg) — Tue, 08 Jul 2025 03:32:54 GMT

Exciting times ahead for new owners Mick and Kathleen McConachy

Read all about it in the Townsville Bulletin here

Why Queensland is great for Business

team@bolstar.com (Trent Yesberg) — Wed, 28 May 2025 01:58:12 GMT

Queensland isn’t just the Sunshine State in name—it’s also one of the brightest places in Australia to start and grow a small business.

Lifestyle, Lifestyle, Lifestyle.... Ok there is more to Queensland than just Lifestyle.

Here’s why Queensland continues to attract and support small business owners across the country:

Population Growth Means More Opportunity

Queensland is one of Australia’s fastest-growing states, with major population influxes to South East Queensland as well as steady growth in regional centres like Townsville, Cairns, and Rockhampton. More people means more demand—for housing, services, products, and experiences—creating fertile ground for small businesses to thrive.

Business-Friendly Government Support

Queensland’s state government offers a range of programs, grants, and incentives for small businesses. From digital capability funding to mentoring programs, there are initiatives tailored to help businesses start, scale, and innovate. The Queensland Small Business Commissioner also advocates for fair treatment and supports dispute resolution, making the business landscape more transparent and manageable.

Lower Costs Compared to Southern States

Compared to Sydney and Melbourne, Queensland offers lower commercial rents, reduced cost of living, and fewer operating overheads—especially in regional areas. These cost advantages make Queensland an ideal location for businesses looking to maximise their margins while maintaining a high quality of life.

Strong Regional Economies

Outside the capital, Queensland boasts robust regional economies built on industries like agriculture, mining, manufacturing, tourism, and education. These regions offer untapped opportunities and a strong sense of community, where local businesses are truly valued and supported.

Connectivity and Infrastructure

Queensland has invested heavily in infrastructure, including transport, internet connectivity, and logistics hubs. Initiatives like the CopperString 2032 energy project in North Queensland and the Brisbane 2032 Olympic Games are expected to inject billions into the economy—spurring business growth in construction, services, and supply chains.

Supportive Small Business Networks

From chambers of commerce to regional business groups and online communities, Queensland is rich with peer-to-peer support. Entrepreneurs can tap into mentoring, co-working spaces, networking events, and training opportunities, often at little or no cost.

A Lifestyle Advantage That Attracts Talent

The work-life balance in Queensland is second to none. Great weather, coastal living, national parks, and affordable housing make it easier to attract and retain staff. Employees are increasingly seeking more than just a paycheck—they want a better life, and Queensland delivers.

Innovation and Digital Adoption

Queensland is not just about beaches and bush—it’s also a growing hub for innovation. From agtech in the outback to fintech in Brisbane, Queensland businesses are embracing digital tools, automation, and AI to improve operations and customer experiences. Programs like Advance Queensland are fuelling this evolution with funding and partnerships.

Whether you're a solo entrepreneur, a family-owned business, or a growth-stage startup, Queensland provides the right environment to flourish. With supportive policy, lifestyle perks, and economic momentum, it's easy to see why so many Australians are choosing to base their business in Queensland.

Ready to explore the opportunity? There’s never been a better time to turn your business dreams into reality—in the Sunshine State.

Contact Trent to discuss your Queensland move today!

What’s a Good Business Worth?

team@bolstar.com (Trent Yesberg) — Sat, 10 May 2025 07:09:34 GMT

Understanding Business Valuation (in the Australian Market)

When you're considering buying a business in Australia, one of the most important—and often confusing—questions is: "How much is this business actually worth?" Business valuation isn't just a matter of looking at the asking price; it involves a careful assessment of the business’s financials, market position, and future potential. Whether you're eyeing a café in Brisbane, a trades business in Townsville, or an online store based in Sydney, understanding valuation can help you avoid overpaying and make smarter investment decisions.

In this article, we’ll break down the key valuation methods, what drives value in Australian businesses, red flags to watch out for, and practical tips to assess whether a business is truly a good deal.

Why Valuation Matters

Business valuation is more than just an academic exercise. It helps you:

Avoid overpaying or underbidding.
Secure appropriate finance from banks or investors.
Justify your offer during negotiation.
Understand potential return on investment (ROI).
Determine the risks versus rewards.

Unlike real estate, there's no fixed market rate per square metre. Business value is largely based on future earnings, risk profile, and industry dynamics. That’s why knowing how to interpret valuation is critical.

Common Valuation Methods in Australia

1. EBITDA Multiple Method

EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortisation. It reflects the business's operating profit before non-cash and variable expenses.

How it works:
Valuation = EBITDA × Industry Multiple
Example:
If EBITDA = $250,000 and the industry multiple is 2.5, then business value = $625,000

Common multiples in Australia (as a guide):

Cafés & hospitality: 1.0–2.5×
Trade & construction: 2.0–3.5×
Online businesses: 2.0–4.0×
Professional services: 2.5–4.0×

What impacts the multiple?

Stability of earnings
Size of business
Industry risk
Owner involvement
Quality of systems and staff

2. Net Profit Method

This method uses the adjusted net profit (after normalising owner’s wages and removing one-offs).

Valuation = Adjusted Net Profit × Market Multiple
It’s similar to EBITDA but more useful for smaller businesses where depreciation and interest are less relevant.

3. Asset-Based Valuation

Used where assets drive value—think manufacturing, agriculture, or transport.

Valuation = Net Tangible Assets + Goodwill (if applicable)
Assets are assessed at fair market value, not just book value. This method is less relevant for service-based businesses.

4. Cost to Establish

This is the "replacement value" of the business—what it would cost to build it from scratch.

Useful for:

Franchise resales
Recently established businesses
Businesses with limited profit history

But remember, just because it cost $300,000 to set up doesn't mean it's worth $300,000 today.

5. Rule of Thumb Valuations

In some industries, especially retail and hospitality, quick rules of thumb are used, like:

Cafés: 30–50% of annual revenue
E-commerce: 2–3× net profit
Hair salons: 50–80% of turnover

These are only rough guides and should never replace a proper financial analysis.

Factors That Influence Valuation in Australia

✅ 1. Profitability

High, stable profits = higher value. A business making $200,000 profit consistently is much more valuable than one fluctuating between losses and gains.

✅ 2. Owner Dependency

If the owner is the business (e.g., a sole operator), it reduces value. Buyers must replace the skillset or customer trust.

✅ 3. Location

A well-located business (e.g., a bakery on a busy footpath in Brisbane) may command a premium. Remote or regional locations could affect value—but also opportunity.

✅ 4. Lease Terms

A good lease = stability. Buyers look for secure terms (3–5 years minimum) and fair market rent.

✅ 5. Brand Strength & Reputation

Customer loyalty, strong Google reviews, and social media presence can translate into higher goodwill.

✅ 6. Industry Trends

Is the sector growing or declining? A cleaning business may be more appealing than a DVD rental store, no matter how strong its recent profits look.

What About Goodwill?

Goodwill is the "intangible" part of a business—brand, customer loyalty, location, systems, staff, etc.

It’s often the most disputed part of valuation.

Goodwill = Sale Price – Value of Tangible Assets

If a business sells for $450,000 and its assets (stock, equipment, vehicles) are worth $150,000, then goodwill = $300,000.

You should ensure that goodwill is supported by real value: repeat customers, documented systems, staff who will stay on, etc.

Common Red Flags in Business Valuation

Here are signs that a business may not be worth the asking price:

�� Profits declining over multiple years
��️ Owner wants a quick sale with limited records
�� Overreliance on one customer or supplier
�� Unverifiable “cash” income claims
�� Business depends heavily on the owner’s knowledge
��️ Equipment and assets are old or overvalued

Always request:

Profit & Loss statements (3 years)
BAS returns
Lease agreement
Asset register
Staff and payroll details
List of top customers and suppliers

How to Determine if It’s a Good Deal

Here’s a 5-step checklist to help assess value:

1. Understand Your ROI

Return on Investment = Annual Profit ÷ Purchase Price

If a business returns $100,000 profit and the asking price is $300,000, ROI = 33%. This is a strong result (many buyers aim for 25–35%).

2. Compare with Similar Sales

Ask brokers or consult databases like:

Bsale.com.au
Seek Business
Businessforsale.com.au
Commercialrealestate.com.au

3. Check for Risk Discount

A small, owner-operated business is riskier than a franchise with brand support. That risk should be reflected in the price.

4. Factor in Working Capital Needs

Don’t spend all your cash on the purchase—businesses often need 10–20% of the purchase price in working capital post-settlement.

5. Get a Professional Valuation

A licensed business broker, accountant, or valuer can provide a written valuation or review the seller’s asking price.

Valuation Examples

Example A – Trade Business in Townsville

EBITDA: $300,000
Industry multiple: 2.8×
Estimated value: $840,000
Assets: $200,000
Goodwill: $640,000
�� Buyer should assess client contracts, staff reliability, and pipeline before paying premium.

Example B – Online Retail Store

Net Profit: $150,000
Asking price: $450,000
ROI = 33%
✅ Looks healthy, but buyer must check traffic sources, brand ownership, and supplier relationships.

Example C – Café in Sydney

Turnover: $700,000
Profit: $120,000
Asking price: $320,000
�� 2.7× profit may be high unless it has strong lease, foot traffic, and staff continuity.

Final Tips Before You Buy

�� Always perform due diligence with your accountant or broker.
�� Ask the seller: “What would you do to grow this business if you were staying on?”
�� Be wary of emotional pricing—just because someone spent $400,000 building it doesn’t make it worth that.
�� Get agreements in writing, including any vendor finance or training period.

Conclusion

Understanding business valuation is crucial when buying a business in Australia. It’s not just about the numbers—it's about the why behind them. Strong profits, good systems, minimal owner reliance, and future growth opportunities are what truly drive value.

When you know how to interpret the price tag, you gain confidence and negotiation power. So whether you're looking at your first business or your fifth, always take the time to assess value beyond the surface—and seek expert advice when needed.

Of course, reach out to me to discuss your thoughts and requirements. I'd love the opportunity to chat

Trent Yesberg

Managing Director

Yes Property & Finance

0438 737 512

trent@yespf.com.au