--- title: "Software and IT Business Valuations in Sydney" url: https://businessvaluationssydney.com.au/industries/technology-and-software/ description: "How an established Sydney software or IT business is valued: recurring revenue, customer churn, development costs, founder reliance and the method used." updated: 2026-11-15 --- # In a Sydney software business, the revenue that renews is what a buyer pays for. This page is about established software and IT businesses with paying customers. A valuer looks at how much revenue repeats, how easily customers could leave and how much still rests on the founders. Get my fixed fee[Every industry](https://businessvaluationssydney.com.au/industries/) - $1,495 + GST The fixed fee where turnover is below $2 million, put in writing before we begin - 2 business days From payment and complete information to a signed small-business report - 32 York St Our Sydney office, in the CBD. Most of the work is done from your documents and a call - 10 years How long the working file behind each report is kept Delivery time starts once payment and all required information have been received. An established software or IT business in Sydney is valued on its future cash flow. The first question is how much of this year's revenue will be there next year. A valuer separates subscription and support income that renews from project work that has to be won again, then tests how often customers leave and how much rests on a few of them. Capitalised development costs and low founder salaries are adjusted. A start-up with no revenue yet is a different job, and not the one this page describes. ## Revenue that renews is worth more than revenue that has to be won again. A buyer pays for income they can rely on. Subscriptions, support contracts and managed services that renew without a new sale are valued more highly than implementation projects and one-off licence sales, where next year starts from nothing. A valuer measures how sticky the recurring part is: how many customers leave each year, how long contracts run, and how deeply the product sits in the customer's own systems. The signed report is $1,495 + GST where turnover is below $2 million, ready in 2 business days, and $2,495 + GST from $2 million to $3 million, ready in 3 business days. Delivery time starts once payment and all required information have been received. Get my fixed fee[See every fee](https://businessvaluationssydney.com.au/fees/) ## The same software business can report two different profits. One company treats its developers' wages as an asset and spreads the cost over years; another expenses them as paid. The cash is the same and the reported profit is not, so a valuer puts both on one footing. Founders who draw little are costed at a market salary, and the business is tested for how well it would run without them. - Development costs carried on the balance sheet - Founder pay below a market salary - Grants and one-off project income that may not repeat - Revenue billed in advance but not yet earned ## In New South Wales a buyer takes on the office lease and the agreements behind the revenue. The NSW Government uses the name Tech Central for an innovation district in inner Sydney that takes in Surry Hills, Haymarket, Ultimo, Eveleigh, Chippendale and Camperdown, near Central Station. Wherever in Sydney the office is, a valuer reads its lease for the term remaining, what it costs, and whether the space still suits a team that works partly from home. The larger question on a sale is what the company can hand over. Customer contracts often need the customer's agreement before they are assigned or the supplier changes owner. A valuer also asks for the staff and contractor agreements that give the company its rights in the code, because a buyer pays less for software it cannot be sure it owns. What each agreement requires is for the company's lawyer. ## Does discounted cash flow or capitalised earnings fit an established software business? Either can, and the choice follows the growth. Where profit is steady, capitalising maintainable earnings is the plainer route. Where revenue is still climbing and costs have run ahead of it, a discounted cash flow follows the forecast year by year and tests each assumption against the renewal record. Net assets says little, because code and customer relationships are not on the balance sheet at what they are worth. ## Technology and software: questions we are asked. ### Do you value pre-revenue start-ups in Sydney? That is a different job from the one this page describes. A start-up with no revenue has no earnings to capitalise, so its value rests on forecasts and funding terms. Our fixed fee assumes at least three years of financial statements prepared by an accountant. If yours is earlier than that, say so on the form and a valuer will tell you whether we can help. ### What are the ATO's safe harbour methods for employee share scheme shares? For the employee share scheme start-up concession, the ATO has set out two safe harbour methods for valuing unlisted ordinary shares. In one, a suitable valuer or the company's own chief financial officer works out the value and the directors endorse it; the other is a net tangible assets method open only to companies that meet set conditions. Whether either applies to your company is a question for your accountant. ### Does a Tech Central or Sydney CBD address add to the value? Not by itself. A buyer pays for revenue, customers and people, not for a postcode. Location matters through its effects: what the office costs, how long the lease runs, and whether the business can hire and keep the engineers it needs. A valuer looks for those in the accounts and the staff record. ### A few customers make up much of our revenue. How does a valuer treat that? As a risk to be measured. A valuer reads each large contract for its term, notice period and price terms, and works out what profit would remain if one of those customers left. A long contract with a customer who would struggle to switch carries less risk than a rolling monthly arrangement. Other industries - [Valuing a professional services firm in Sydney](https://businessvaluationssydney.com.au/industries/professional-services-firms/) - [Valuing a retail or online business in Sydney](https://businessvaluationssydney.com.au/industries/retail-and-online/) ## Where the rules on this page come from This page describes the rules in general terms. It is not legal, tax or duty advice: your lawyer or accountant advises on how a rule applies to you. - [Tech Central](https://www.nsw.gov.au/business-and-economy/innovation/tech-central), NSW Government - [Methods for valuing unlisted shares for the employee share scheme start-up concession, LI 2025/19](https://www.legislation.gov.au/F2025L01085/latest/text), Federal Register of Legislation - [Employee share schemes: safe harbour valuation methods](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/employee-share-schemes/in-detail/safe-harbour-valuation-methods), Australian Taxation Office Ask a valuer ## Tell us about the business. A few lines is enough. A valuer replies within one business day with the package that fits, your fixed fee in writing and a delivery date. Small Business Valuation $1,495 + GST The package for turnover below $2 million: a signed report in 2 business days. Delivery time starts once payment and all required information have been received. Larger than that? The fee steps up with turnover. [See every fee](https://businessvaluationssydney.com.au/fees/) Page last reviewed on 15 November 2026. Business Valuations Sydney, 32 York Street, Sydney NSW 2000. --- Business Valuations Sydney · 32 York Street, Sydney NSW 2000 · https://businessvaluationssydney.com.au/start/