If your business broker can’t give you a valuation on your strata business, then they have no business brokering strata.
If your business broker is talking only in terms of a simple number with a 3 in front of it, then chances are they have no clue. Put another way, they’ve stumbled into strata brokering and are going to learn on your time and potentially at your cost.
What is a ‘multiple’ or ‘multiplier’ in the strata industry?
- A rule of thumb that – might have worked perfectly fine 10 or 20 years ago but no longer works because pricing, revenue streams, and cost bases have shifted.
- The strata industry has an array of management companies of varying sizes, scale, operational set-ups, and revenue models. In this context, how can you value a strata business in such a basic way?
- So, in summary a multiple is probably a lazy or ill-informed way that a broker is trying to apply to the fruits of your labour so they appear like they know what they’re talking about.
At the end of the day, purchasers and investors buy value based on valuation and transactions that go through on valuation. To successfully value and transact a strata management business requires specialised knowledge and experience.
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