iscover How accountants can help owners build businesses that investors want to buy into
BusinessWorking backwards from valuation: When business owners tell me they want a higher valuation, it’s almost never about technical modelling. What they’re really trying to say is: I want choices, writes Nitesh Roopa.
Choices to bring someone into their business without losing control. Choices to secure funding that doesn’t keep them awake at night. Or choices to one day sell the business and walk away with something meaningful.
In Australia, accountants sit right at the centre of that journey. Whether we realise it or not, we’re often the only professionals small-business owners see regularly, and that gives us an opportunity to shape the foundations long before anyone talks about multiples or sale processes.
Over the past few years, I’ve noticed that the biggest improvements in valuation don’t come from sophisticated deal mechanics. They come from much simpler shifts in how owners understand and run their business. And accountants are perfectly placed to guide those shifts.
1. Clean financial foundations always beat clever narratives
One of the fastest ways to shrink a valuation is messy financial architecture. Not because investors or bankers want perfection, but because inconsistency creates doubt, and doubt gets priced in immediately.
I’ve seen situations where owners had great businesses, but their numbers weren’t set up to show that strength. Personal and business costs are mixed. One-off items are buried where they shouldn’t be. Revenue was grouped in a way that hid what was actually driving margin.
These things aren’t minor. They shape how a potential investor interprets the whole story.
Accountants can make an enormous difference here by doing the unglamorous work:
- Redesigning the chart of accounts so that revenue and gross margin drivers are obvious
- Normalising owner-related items so that earnings quality is transparent
- Applying consistent accruals and cut-off so year-on-year comparisons make sense
Three years of clean, comparable numbers change the entire tone of a valuation conversation. Suddenly, the owner is not explaining anomalies; they’re talking about the business itself.
2. Help owners shift focus from what happened to what’s possible
Most owner–accountant conversations still revolve around what happened last year. Necessary? Yes! But not enough when valuation depends almost entirely on the future.
I’ve found that once owners can see their next three years, mapped out simply, with assumptions they recognise, their thinking changes entirely. It becomes easier to talk about pricing, resourcing, investment, and risk. It also becomes easier to talk about value.
You don’t need a 400-line financial model to do this. A straightforward three-way forecast is more than enough, if it’s connected to reality:
- Expected sales cycles
- Realistic cost movements
- The timing of cash, not just profit
- Two or three scenarios that show the actual sensitivities
When owners see how a small improvement in gross margin or a slightly shorter cash conversion cycle affects the long-term value of their business, valuation stops feeling like a distant technical concept. It becomes a management conversation they can act on.
3. Make risks visible and then help owners reduce them in practical ways
Valuation is, at its core, a pricing of risk. And small businesses are full of risks that owners stop noticing because they live with them daily:
- One customer making up 30 per cent or more of revenue
- One service line carrying the rest of the business
- The owner being the default decision-maker for pricing, sales, and approvals
- Undocumented processes that only “live” in one mind
Most of these aren’t finance risks, but they show up in value immediately.
Accountants, because we deal with the numbers, can often spot these patterns sooner than anyone else. I’ve had conversations where simply mapping revenue by customer, or margin by service line, exposed risks the owner had never consciously articulated.
And we don’t have to solve every risk. Often, the most supportive role we can play is to help owners take the first step: documenting a process, delegating a task, testing a small diversification, or setting a pricing rule.
Tiny risk reductions, done consistently, make the business more resilient and more attractive. And valuations always reward resilience.
A complementary role, not a competitive one
None of this replaces the work of corporate finance teams, brokers, or specialist valuers. Instead, it strengthens their work by ensuring the financial story is credible, consistent, and aligned with how the business actually operates.
For many accounting practices, there is an opportunity to intentionally lean into this space. Not by adding new services, but by reframing the conversations we’re already having with clients, and by helping them see the connection between everyday discipline and long-term value.
Because in my experience, increasing valuation is not about a perfect spreadsheet. It’s about steady, transparent habits carried over the years. And accountants are uniquely positioned to help business owners build exactly that.
Nitesh Roopa is a chartered accountant and founder of ProfitPulse.
