Business Valuation · Buy-sell agreements
Setting Up or Reviewing a Buy-Sell Agreement?
A buy-sell agreement only works if the value it uses is realistic. An independent valuation helps owners agree a figure or formula, and set insurance cover at the right level.
- An agreed value or formula that will hold up
- Insurance cover matched to the real value
- Fewer disputes if a trigger event happens
What we do
We value each owner's interest so the agreement and any life or TPD insurance funding it start from a sound figure.
We review existing valuation formulas and show what they would produce today, compared with market value.
When a trigger event happens, such as death, disability or retirement, we can value the departing owner's interest under the agreement.
Issues that often complicate the work
Out-of-date values
Many agreements use a figure set years ago. If the business has grown, the departing owner or their estate may receive far less than the interest is worth.
Formulas that misfire
A simple multiple of revenue or profit may ignore debt, surplus assets or owner salaries.
Insurance gaps
If cover is set below value, the remaining owners may not be able to fund the buyout.
Minority and control
The agreement should say whether discounts apply. Silence often leads to disputes.
Our approach
- Read the agreement and confirm the valuation basis with the owners and their lawyer.
- Value the business and each interest, and compare with any formula in the agreement.
- Recommend whether the agreed value or the insurance cover should be updated.
Principal
Principal
Erin Huang, CPA
Principal, Maxwind
Erin is the principal of Maxwind Analytics. Her background combines corporate finance, building and running businesses, and specialist valuation and forensic work.
Maxwind Analytics has advised Melbourne businesses and their advisers since 2020.
About ErinHow the engagement works
- EnquiryTell us about the matter by phone or through the enquiry form.
- Conflict and scope checkWe confirm we can act independently and agree what needs to be answered.
- RecordsYou provide the records we need through a secure link.
- Analysis and deliverableWe complete the work and explain the findings before finalising.
Fees and timing
Offered with a clear scope and a fixed fee. Many owners refresh the valuation every one to two years.
Questions we are often asked
How often should a buy-sell valuation be updated?
Every one to two years, or after any major change in the business. An out-of-date figure is the most common cause of disputes.
Discuss your buy-sell agreement
A short conversation is usually enough to tell whether we can help and what the work would involve.
