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Based in Melbourne (Victoria) we deliver business valuations all over Australia using expert business valuers and resources that allow us to work remotely.

We have completed:

Contact Us

L3/162 Collins St, Melbourne, 3000

0421 069 717

m.williams@exitvalue.com.au 

Training Business Valuation Issues 

The Training sector is a regulated part of the larger Educationa and Training industry and has seen significant changes over the past decade. 

 

These include:

  • Increased government funding through VET FEE Help Scheme in 2009 and Industry Partnership Agreement in 2012.

  • Changes to state and federal regulations (the previous RTO system)

The increase in government funding reduced some financial barriers to access vocational education and resulted in an increase in the number of private vocational education providers. 

There has been some rationalisation of smaller training providers as state based TAFE organisations account for 40% of industry revenue.  Increased regulatory requirements and training has seen some training providers leave the industry or close.

With continued low unemployment levels we expect the demand for vocational training to remain high.

Key Drivers of Training Business Valuations

Key Industry Statistics

According to IBISWorld, the Technical and Vocational Education and Training industry:

  • Grew revenue by 2.3% pa over the past five years to $12bn.

  • Average revenue per business is $2.4m

  • TAFE organisations in all states account for 40% of industry revenue

  • Over 96% of industry organisations employ fewer than 20 staff or are non-employing.

We have collated industry performance statistics based on ABS data and detailed them in a whitepaper, which can be downloaded from the link below.

What Makes a Business Highly Valuable?

SME Performance Whitepaper

A Training business valuation is driven by key factors below such as: 

  • Number of students and qualifications approved

  • Level of state and federal funding for particular industries

  • Low reliance on key owners and staff structure in place

  • Effective document management systems and integrated IT systems

  • Access to online platforms that integrate to qualification providers

 

EBITDA Margins range from 20% to 45% (for some large practitioners), depending on the size of the business, localtion, range of services, technology and automation.

Typical EBITDA Multiple ranges we have observed are:

  • Revenue of $1m - $10m: 0.5x - 2.5x

  • Revenue of $10m - $20m: 2.0x - 4.0x

  • Revenue greater than $20m: 3.5x - 5.5x

Our Business Valuation Experience

Our training business valuation experience has included including business valuations for:

  • Two person RTO providing frontline management, retail, logistics and stevedoring qualifications

  • 10 person training business in First Aid and Construction and Automotive sectors

  • 15 person training business for first aid and security training to clubs, bars, entertainment venues and general events

  • English language training for immigrants

  • International tertiary student ​placement and English language training