Fire Protection Business Valuation Checklist (Australia)

The Complete Fire Protection Business Valuation Checklist

Use this checklist when evaluating a fire protection business in Australia. Work through each section before finalising your offer price or engaging specialist advisors.

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Phase 1: Financial Assessment

Revenue Quality

• Obtain P&L statements for the last three financial years (two years minimum)
• Request a revenue breakdown by job type: maintenance contracts, installation projects, emergency call-outs, other
• Calculate the maintenance contract percentage of total revenue for each year
• Confirm whether the maintenance revenue is under written contracts or verbal arrangements
• Check whether revenue is trending up, flat, or declining year-on-year
• Ask whether any significant clients were added or lost in the last 18 months

EBITDA Normalisation

• Obtain the seller's EBITDA figure and list every add-back they're claiming
• Verify owner's salary against market replacement cost (field technician supervisor or operations manager rate in your state)
• Identify personal expenses running through the business: vehicle, phone, travel, insurance
• Note any one-off costs in recent years that the seller is adding back (legal disputes, equipment write-offs)
• Check whether any related-party transactions exist (equipment hired from the owner, premises owned by the owner)
• Calculate your own normalised EBITDA and compare to seller's figure
• Apply your target multiple to normalised EBITDA to get a preliminary enterprise value

For the add-back verification framework, see the EBITDA add-backs verification checklist.

Working Capital and Assets

• Confirm whether plant and equipment is included in the sale price or listed separately
• Request a fixed asset register with purchase dates and current book values
• Check whether any equipment is under finance (ask for payout figures)
• Confirm the debtors ledger — outstanding invoices over 60 days are a risk signal
• Check stock levels if the business holds significant inventory (extinguisher stock, suppression components)

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Phase 2: Contract Book Analysis

Maintenance Contracts

• Obtain a full list of active maintenance contracts including: client name, annual contract value, contract start date, renewal terms, notice period
• Calculate average contract tenure for existing clients
• Identify contracts expiring within 12 months of your planned settlement date
• Confirm whether contracts contain automatic price escalation (CPI or fixed percentage)
• Ask whether contracts are in the business name or the owner's name
• Check whether any contracts are verbal or email-based rather than signed documents

Client Concentration

• List top 10 clients by annual contract value
• Calculate the revenue percentage of the top 1, top 3, and top 5 clients
• Flag any single client above 15% of total maintenance revenue for further investigation
• Ask whether there is a formal relationship agreement (master services agreement, preferred supplier contract) with major clients
• For strata or property management clients: confirm the relationship is with the property manager, not with a specific contact who may leave

Installation Revenue

• Confirm what portion of installation revenue is from existing maintenance clients (lower risk) vs new clients (higher risk)
• Check whether there is a qualified estimator/project manager or whether the owner quotes all installation work
• Review the pipeline — what installation jobs are contracted but not invoiced at time of sale
• Understand how installation work is sourced: repeat clients, referrals, tender processes, broker relationships

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Phase 3: Licence and Compliance Verification

Technician Licences

• Request a list of all employees who hold fire protection licences, and the specific licence types each holds
• Verify licence currency by checking the relevant state authority (QBCC in QLD, VBA in VIC, NSW Fair Trading in NSW, etc.)
• Identify which licences are required to perform the core maintenance work legally
• Confirm the employment status and intention of each licensed technician post-settlement
• Check whether any apprentices are partway through licence training (asset or liability depending on timing)
• If the owner holds the primary contractor licence: understand the plan for continuity — this should affect deal structure

Business Licences and Registrations

• Confirm the business holds the relevant contractor licence for each state it operates in
• Check for any outstanding conditions, suspensions, or complaints with the licensing authority
• Verify whether there are any trade memberships relevant to client relationships (FPAA membership, etc.)
• Confirm the business is registered for GST and BAS is current
• Ask whether the business has an active workers' compensation policy with current premiums paid

Compliance Records

• Request service records for the past two years — confirm all scheduled AS 1851 inspections were completed on time
• Ask whether there are any outstanding defect notices or non-compliance reports for client sites
• Check whether there have been any insurance claims, workplace incidents, or WorkSafe/SafeWork investigations in the last five years
• Confirm no outstanding ATO liabilities (request ATO tax clearance or portal printout)

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Phase 4: Equipment and Asset Assessment

Vehicles

• List all vehicles used in the business and their ownership status (owned, leased, financed)
• Note age and condition of each vehicle — fire protection work requires frequent roadside stops and ladder work
• Check rego and roadworthy certificates are current
• Understand what vehicles (if any) are personal-use mixed with business use

Test and Inspection Equipment

• List all specialised testing equipment: flow meters, pressure gauges, detection system testers, emergency lighting test kits
• Confirm calibration certificates are current where required
• Identify any equipment that will need replacement or recalibration within 12 months
• Check whether equipment is owned outright or under finance/lease

Stock and Inventory

• Conduct a stock count or request an itemised inventory list
• Check for obsolete or slow-moving stock (older extinguisher types that are being phased out, etc.)
• Understand supplier relationships — is there a preferred supplier discount arrangement that transfers with the business?

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Phase 5: Staff and Team Review

Technician Assessment

• Map each technician: name, role, licence types, years with the business, employment type (employee vs contractor)
• Identify who manages the scheduling and dispatching of technicians
• Understand the technician-to-contract ratio — how many service calls per technician per week is standard?
• Ask which technicians have client relationships that could be at risk in a transition
• Confirm whether there are any outstanding employment disputes, underpaid entitlements, or HR issues

Admin and Operations

• Identify the job management system used (Simpro, Fergus, AroFlo, etc.) and who manages it
• Confirm whether there is an admin person who handles scheduling, invoicing, and client communication
• Understand the invoicing cycle and whether accounts receivable management is documented
• Ask whether the owner is the primary contact for any large clients

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Phase 6: Market Position and Growth Assessment

Competitive Position

• Identify the main local competitors — is the business competing on price, quality, or relationship?
• Ask whether the business has lost any significant maintenance contracts in the last two years and why
• Check whether there are national compliance service companies operating in the same geographic area
• Understand the business's reputation: Google reviews, FPAA standing, referral sources

Growth Potential

• Estimate the number of buildings in the service area that are not currently clients
• Assess whether there is capacity to take on additional maintenance contracts with existing staff
• Understand whether the business has any geographic expansion opportunity or whether it is at natural capacity
• Ask whether the owner has turned work away in the last 12 months due to capacity

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Scoring and Decision

Once you've completed the checklist, score the business across five dimensions on a scale from 1 (poor) to 5 (excellent):

• Revenue quality (maintenance contract percentage, contract documentation): ___ / 5
• Licence security (number of licensed techs, owner dependence): ___ / 5
• Client diversification (concentration risk, contract tenure): ___ / 5
• Team stability (staff retention, admin capability): ___ / 5
• Financial integrity (clean add-backs, verified EBITDA): ___ / 5

Total: ___ / 25

A score of 20 or above supports the higher end of the valuation range (4x to 5x EBITDA). A score of 15 to 19 supports the middle range (3x to 4x). Below 15, either renegotiate the price significantly or walk away — the risk is priced into a lower multiple for a reason.

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Related resources

• How much is a fire protection business worth in Australia — market multiples and valuation ranges
• Full due diligence checklist — broader acquisition due diligence
• Industry Multiples Cheat Sheet — comparison across trades sectors
• Module 4: Valuation and Pricing — the full framework for valuing any trades business