Why the work in a trades valuation varies so widely
How much work a trades valuation involves depends more on the shape of the business than in almost any other industry Oliver Group values. A sole-trade electrician with a ute, a handful of residential jobs on the go and no employees sits at the simple end: the work is close to valuing a job, not an enterprise. A mid-size contracting company with a project pipeline, subcontractor panels, retentions held on multiple jobs and percentage-of-completion revenue recognition is a different engagement altogether, closer in complexity to valuing a professional services firm with long-dated contracts. Between those two poles sits every plumbing outfit, shopfitting business, civil subcontractor and building company in the country, and trades is one of the industries where what traditional firms charge genuinely reflects the underlying complexity spread rather than firms simply charging what the market will bear. Oliver Group's fee does not move with that spread: it is set by the annual turnover of the business, and what changes is the work.
The spread of work explained
At the simple end: a sole trader or single-entity licence holder with straightforward job-costing, no work-in-progress carried across balance dates, and earnings that are really the licence holder's labour plus a modest margin. This is often the least complex valuation Oliver Group prepares: normalised earnings are capitalised, with the labour-versus-profit split as the main analytical question. At the complex end: a contracting company with multiple concurrent projects, retentions receivable and payable, subcontractor liabilities, plant financed across several facilities, and revenue recognised on a percentage-of-completion basis that does not map cleanly to cash received. This requires construction-specific balance-date adjustments before any valuation methodology can even be applied, plus scrutiny of the order book as forward-earnings evidence. The difference between these two engagements is materially more analytical hours and more information to assemble. It is not a difference in fee: at the same annual turnover both pay the same fixed fee.
The WIP driver: why percentage-of-completion accounting changes the work
Most trades and construction businesses above a certain size recognise revenue using percentage-of-completion, not on invoicing or cash receipt. That means reported earnings at any balance date include unbilled revenue on jobs still underway, offset by costs incurred but not yet recovered. Under-billings (costs incurred ahead of billing) and over-billings (billing ahead of costs incurred) both distort a raw earnings figure if left unadjusted: a business that looks highly profitable at year-end may simply be sitting on a pile of over-billed cash it owes back in future-period costs. Retentions held by principal contractors (commonly 5% to 10% of contract value, released on practical completion and again at the defects liability period) also need to be identified and treated correctly: as a receivable with timing risk, not as realised earnings. This construction-specific balance-date work is the single biggest reason a contracting company's valuation takes more work than a simple trade business of similar revenue, and it is why a valuer who has not worked with WIP schedules before can materially misstate maintainable earnings.
The licence-dependency driver
In most Australian states, operating as a licensed builder, electrician, plumber or gasfitter requires a nominated individual to hold the relevant licence or registration: and the business's ability to legally continue trading, tender for work, or hold professional indemnity and home warranty insurance can depend on that person remaining involved. A valuer has to ask a question that does not arise in most other industries: what happens to this business's earning capacity if the licence holder leaves, retires, or is unable to continue? Where the business has multiple licensed staff, documented succession arrangements, or the licence sits with the corporate entity rather than a single individual, key-person risk is lower and the earnings multiple can reflect that. Where the entire licensed capacity rests on one person with no identified successor, a key-person discount is generally applied: the same way it would be for a medical practice or law firm built around a single principal. This is assessed on the specific facts of the business, not assumed either way.
Pipeline versus history: weighing the order book
Most valuation methodologies look backward: normalised historical earnings, capitalised at an appropriate multiple. Trades and construction businesses often argue their forward order book is a better indicator of maintainable earnings than trailing figures, particularly where a business has just won a larger contract or moved up a tender panel. This evidence matters, but it has to be weighed carefully: a signed contract with a committed principal is materially different evidence to a verbal in-principle award; a tender win rate calculated over 30 tenders is more reliable than one calculated over four; and project concentration, where a large share of the order book sits with one or two principals or one large job, is itself a risk factor that can offset the apparent benefit of a strong pipeline. The valuer's job is to weigh this forward-earnings evidence against the historical base, not to simply substitute the bigger number.
Plant and vehicles: owned versus financed, and what they're actually worth
Trades and construction businesses typically carry a fleet of vehicles and, depending on the trade, plant and equipment: excavators, scaffolding, generators, specialised tools. Two questions matter for valuation purposes. First, ownership: equipment under finance or hire-purchase sits differently on the balance sheet than owned assets, and the net position (asset value less remaining finance liability) is what feeds into a net asset value cross-check, not the gross asset figure. Second, market value: book value (cost less depreciation) frequently diverges from what plant and vehicles would actually realise if sold, particularly for older equipment that has been well maintained or, conversely, run hard on-site. Where plant and equipment forms a meaningful share of the business's value, as it often does for civil, earthmoving or larger construction outfits, verifying market value against comparable sale evidence, rather than relying on the depreciation schedule, is part of a properly evidenced valuation.
Oliver Group's fixed fee
Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business Valuation is $3,495 + GST for turnover over $10 million. For small-business reports a draft is delivered in 2 business days and for medium-business reports in 3 business days; the delivery date for a Large Business Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. Retrospective valuation dates are +$495 each and additional entities are +$795 each. The fee is fixed in writing before work begins and never depends on the concluded value.
Annual turnover under $2 million. Draft delivered in 2 business days.
Annual turnover $2 million to $10 million. Draft delivered in 3 business days.
Annual turnover over $10 million. Delivery date agreed before commencement.
What decides your package
The annual turnover of the business, and nothing else. A sole-trade licence holder under $2 million is a Small Business Valuation. A contracting business turning over $2 million to $10 million is a Medium Business Valuation. Above $10 million it is a Large Business Valuation. Work in progress, retention accounts and multiple entities change how much analysis the file needs, not what you pay, although each additional entity is a published +$795.
What the fixed fee covers, and what it does not
The fixed fee covers the same scope of report at every package, including where the business recognises revenue on a percentage-of-completion basis, holds retentions receivable or payable, or where earning capacity depends materially on a single licence holder with no identified successor. Those features mean more analysis and more information to assemble, not a higher fee. What the fixed fee does not cover is a cross-check of the conclusion against a second or third methodology, expert witness work or tax advice. A second entity and a historical valuation date are the two add-ons set out above. Where the matter could face ATO review or involves a related-party transfer, the file needs to withstand scrutiny rather than just produce a number, and that is the same at every package.
What complexity changes, and where to go next
For a straightforward sole-trade licence holder with clean job-costing and no material WIP, the engagement proceeds normally. A contracting company with WIP schedules, retentions and an order book to evidence pays the same turnover-based fixed fee, for the same scope of report: what changes is the amount of analysis and the time it takes to get the information complete. For the full market landscape, free calculators, broker appraisals, accountant letters, desktop estimates and formal reports, see the pricing guide in our resources library. Oliver Group prepares independent valuations only; we are not a registered tax agent and do not provide tax, legal or financial advice: your accountant applies the report in their domain. What we provide is a fee you know before you start, for a number the evidence defends.