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Electrical, plumbing, air conditioning and fire services contractors, where a book of scheduled compliance work is worth far more than the same profit earned job by job.
A trade contracting business in Melbourne is valued by capitalising the earnings that remain after the owner is paid a market wage for the trade work and the management they do. Recurring maintenance and essential safety measures contracts attract a much lower risk loading than project work, and the vehicles, plant and tools net of finance set the floor.
The usual reasons are a sale to a competitor or a larger facilities group, a succession to a foreman or a family member, a family law settlement, a partner leaving, a bank asking for a figure behind a vehicle facility, or an ATO market value requirement when the business moves from a sole trader into a company or trust.
The most useful result is often the diagnosis rather than the number. A plumbing business in Werribee can be very profitable while the owner is on the tools and worth little more than its vans and stock once they stop. The valuation shows how much of the value sits in transferable maintenance contracts and a licensed team, and how much sits in the owner's own labour and personal registration.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
The Income Approach leads. Scheduled maintenance and compliance work produce earnings that recur without being re-won, which is exactly the situation the income approach is designed for.
The method is capitalisation of future maintainable earnings. We establish what the business sustainably earns once the owner is paid a market wage for the hours on the tools and for running the business, then divide that figure by a capitalisation rate built from a risk-free base and a series of premiums for size, industry and the particular business.
Almost all of the company-specific premium depends on the work mix. A contractor holding essential safety measures, scheduled servicing or facilities contracts across a portfolio of Docklands and Southbank office towers has revenue it can forecast, so the loading is low. A contractor winning fit-out projects one tender at a time has to start every year from zero, so the loading is high even where last year's profit was identical.
Sales of trades businesses of comparable size, discipline and work mix are used to test the range. There is evidence, but less of it than in retail-facing sectors, so it shapes the conclusion rather than dictating it.
Vans, plant, tools and stock at market value, less the finance secured on them. This is the floor, and where the owner is the business and little work is contracted it can be close to the whole answer.
Most disputes about a valuation begin with the adjustments, so every one is listed in the report with the reason for it. For a trade contracting business the items that come up again and again are:
Trades businesses in Melbourne follow the building. The growth corridors in Wyndham, Casey and Hume, where Werribee, Cranbourne and Craigieburn keep adding housing estates, support a large population of electrical, plumbing and air conditioning contractors working for volume builders. The south-east, from Dandenong through to Pakenham, adds the industrial and commercial work, while the CBD, Docklands and Southbank towers generate the compliance and maintenance contracts that hold their value best.
Regulation shapes who can buy the business. Builders and plumbers are registered with the Victorian Building Authority, electricians are licensed by Energy Safe Victoria, and domestic work is governed by the Domestic Building Contracts Act 1995 (Vic). Where the registration or licence sits with the owner personally, a buyer must bring their own licensed person, which narrows the market and is reflected in the rate. A business whose team holds its own licences, and whose electrical contractor registration sits with the company rather than the departing owner, is far easier to transfer, and the comparable set is drawn accordingly.
The sector keeps adding entrants. Construction, the ABS division that trade contracting sits within, grew 3.4 per cent in the national count of businesses in 2025 to 2026 (Source: ABS, Counts of Australian Businesses, July 2022 to June 2026, released 18 August 2026), and Victoria recorded a net increase of 19,581 actively trading businesses across all industries in the same year (same source). Easy entry keeps rates under pressure on project work, which is one more reason a contracted compliance book is valued so differently from a tender-by-tender one.
The report begins by stating what the valuation is for, the standard of value, the valuation date and the information we relied on, including anything we asked for and did not receive. It then sets out each approach considered, the method chosen under it, every adjustment and the reason for it, and reconciles the results into a range with the weighting explained in words.
That explanation is what carries the opinion through review. A conclusion that cannot say why the income result was preferred, or why one point in the range was selected over another, will not survive cross-examination in the County Court of Victoria or a review by an opposing expert. Reports are prepared consistently with APESB, APES 225 Valuation Services and are signed by a credentialed certified valuer who is ready to explain and defend the opinion.
If an opposing expert reviewed this report, which assumption would they go after first, and what would you say in reply? A valuer without a ready answer has not finished.
An Indicative valuation suits an owner trying to work out whether they have a saleable business or a well-paid job. It is for internal decision-making and is not written for third party reliance. A Summary report fits a sale, a partner buy-out or a finance application. A Detailed report is required for family law, a shareholder or partnership dispute, and any matter where another expert will review the opinion.
Depth follows purpose. The more likely the report is to be read by a court, a lender, the ATO or another expert, the more of the reasoning has to be on the page.
For internal decision-making. Useful for testing an offer, setting an expectation before a negotiation, or deciding whether to go to market. It is not written for third party reliance.
Sets out the approaches applied, the normalisation adjustments made and the reasoning behind the conclusion. The usual choice for a sale, an ownership change or a finance application.
Applies and reconciles all relevant approaches in full. The level required where a court, the ATO, a lender or another expert will review the opinion.
Talk your situation through with a certified valuer before you commit to anything, at no cost.