What is my mechanic business worth? How auto repair workshops are valued in Australia.
A mechanical workshop is usually valued as a multiple of its maintainable earnings. Maintainable earnings are the profit after adding back one working owner's wage and other owner costs. Hoists, tools and diagnostic equipment are normally part of the price, and parts stock is added at value. What moves the price most is the team of qualified technicians, how much work comes back each year, whether a few fleet or trade accounts dominate, and the lease on the workshop.
This guide covers general mechanical repair and servicing, specialist and European workshops, auto electricians, tyre and brake shops, and similar vehicle businesses. Panel beating and smash repair share many of the same points.
Start with maintainable earnings
Start from net profit before tax and add back one working owner's wage and super, depreciation (often large, because of hoists and equipment), interest, private use of vehicles, and genuine one-off costs. Add-backs explained.
Then deduct what a buyer will have to pay that you don't:
- A second working owner, or a partner who runs reception, invoicing or bookkeeping for little or no pay. Many family workshops have one.
- Your own time on the tools beyond one role. If you run the workshop and work a full day as a technician, a buyer who only wants to manage will have to employ a qualified mechanic in your place.
What moves the price
The technicians
A workshop earns from its technicians' hours, so buyers look closely at the team. Qualified technicians who are likely to stay, apprentices coming through, and a service adviser who knows the customers all add value. Wages should meet the Vehicle Repair, Services and Retail Award; if they don't, a buyer will recalculate the earnings at award rates. The more the business depends on you as the main diagnostician, the harder it is to sell.
Repeat customers and accounts
- Repeat servicing customers, reminders for the next service and a steady database are what buyers pay for.
- Fleet, trade or dealer accounts can be valuable, but if one or two make up a large share of revenue, losing one after the sale could wipe out much of the profit. Show the top accounts' share of revenue (names removed at first), and whether any are on a written agreement.
- Know your mix of labour and parts, and your effective labour rate. It tells a buyer how much of the profit comes from work the team does.
Licences
In some states, including New South Wales and Western Australia, a motor vehicle repair business needs its own licence and the people doing the work need certificates. A licence usually doesn't transfer with the business, so a buyer will need to apply for their own before settlement. Check the rules in your state and allow time for it.
Equipment
- List the hoists, diagnostic scanners, alignment and tyre machines, air-conditioning equipment and major tools included in the sale, with their age and condition. Keep hoist inspection records up to date: buyers will ask.
- Any finance on equipment or vehicles needs to be paid out or transferred at settlement.
- Subscriptions to diagnostic software and repair data usually need to be taken over or re-signed by the buyer.
The lease and the site
A buyer will want enough lease left, including options, to earn back what they pay, and a site zoned and set up for vehicle repair. Check the lease's make-good clause: returning an industrial unit at the end of the lease can be costly, and buyers will factor it in. Records of how waste oil, coolant and old parts are disposed of also help.
A worked example
All figures are illustrative, made up for this example, and are not industry data.
A general mechanical workshop has four hoists, three qualified technicians and a second-year apprentice. The owner manages the business and still does diagnostics. The owner's partner runs reception and invoicing part-time without pay. Net profit before tax was $85,000.
| Item | Amount |
|---|---|
| Net profit before tax | $85,000 |
| + Owner's wage and super | $82,000 |
| + Depreciation (hoists, tools and equipment) | $21,000 |
| + Interest on equipment finance | $4,000 |
| + Private use of the owner's ute | $4,000 |
| – Market wage for the partner's unpaid reception and invoicing | –$26,000 |
| Maintainable earnings (PEBITDA) | $170,000 |
If buyers were paying, say, 1.3 to 1.8 times PEBITDA for a workshop like this (illustrative), it would be worth about $220,000 to $305,000, including the hoists, tools and diagnostic equipment, plus parts stock at value.
Two things would move it within that range: whether the technicians are staying, and how much of the work comes from one fleet account. A settled team and a broad customer base push it toward the top.
What buyers of workshops will ask for
- Two to three years of profit and loss statements, plus the current year to date
- Revenue split between labour and parts, and the top accounts' share of revenue
- The staff list with roles, hours, pay rates, qualifications and apprenticeships (no names at first)
- A list of equipment with age, condition and any finance, and hoist inspection records
- The lease, including options, the current rent and the make-good clause
- Licences held, and who holds them
- How new customers find you: Google reviews, referrals, fleet contracts or a website
Selling it yourself? How to sell your business yourself in Australia. Other trade businesses: What is my cleaning or trade business worth? Selling parts or stock? What is my retail shop worth?
What's your workshop worth?
Upload your P&L, and add your lease and roster if you have them. AUS Brokers works out your maintainable earnings with the add-backs explained, applies the multiple range for workshops of your size, and checks comparable workshops for sale in your state. You can add a buyer-ready profile to market it yourself.
An indicative appraisal only. AUS Brokers doesn't provide valuations, and doesn't act for buyers or sellers. Selling in Victoria? Vic Brokers can sell it for you.
Frequently asked questions
How much is a mechanic business worth in Australia?
It depends mainly on its maintainable earnings: net profit plus one working owner's wage and other add-backs. That figure is multiplied by what buyers pay for workshops of that size. A settled team of qualified technicians, repeat customers spread across many accounts and a good lease all push the price up.
Are the hoists and tools included in the price?
Usually yes: the equipment needed to run the workshop is normally part of the price, with parts stock added at value. Any finance on equipment has to be paid out or transferred at settlement.
Does my repair licence transfer to the buyer?
Usually not. In states that license motor vehicle repair businesses, such as New South Wales and Western Australia, the buyer applies for their own licence, so allow time for it before settlement.
Is a big fleet account good or bad for the price?
Both. It brings steady work, but if one or two accounts make up a large share of revenue, a buyer will worry about losing them, and that pulls the price down unless they're on a written agreement that can transfer.
What if I'm the main mechanic?
A buyer who wants to manage rather than work on the tools will have to employ a qualified mechanic in your place, so that wage comes off the earnings. The less the workshop depends on you, the easier it is to sell.
General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.