An Australian catering business typically sells for 2 to 4 times Seller’s Discretionary Earnings (SDE) — the profit the business generates after costs, before the owner pays themselves a wage. The actual multiple depends almost entirely on revenue mix. Corporate catering with multi-year contracts commands the top of that range; event-only operations, where every dollar of next year’s revenue is unbooked, sit at the bottom. A catering operation generating $500,000 in SDE might be worth anywhere from $750,000 to $2 million, depending on how predictable and transferable that revenue actually is.
The range feels large. It is. Here’s what sits at each end.
How Catering Businesses Are Actually Valued
Most catering businesses aren’t valued on revenue. They’re valued on what the business makes after costs — what you could genuinely hand to a buyer and say “this is the profit you’re buying.”
The metric is called Seller’s Discretionary Earnings (SDE) for owner-operated businesses, or EBITDA for larger operations with management teams.
SDE = net profit + owner salary + legitimate add-backs
Add-backs include non-recurring expenses, personal items run through the business, depreciation, and one-off costs unlikely to repeat. Our guide on EBITDA add-backs explains what qualifies and what buyers will challenge.
For catering businesses turning over $1M–$4M, SDE is the standard metric. Above $4M revenue, once you have a general manager and a kitchen manager who aren’t you, buyers typically shift to EBITDA — because the business can run without the owner and the financial picture reflects that.
The single most common mistake catering owners make when calculating their SDE: leaving their own salary as a business expense and then wondering why the number looks terrible. You need to add it back. The buyer will.
Catering Business Valuation Multiples in Australia
Australian catering businesses sell across a wide range because the industry covers very different risk profiles. Here’s a rough guide:
| Business Type | Typical Multiple | Example |
|---|---|---|
| Event/wedding catering, owner-dependent | 1.5x – 2.5x SDE | $300K SDE → $450K – $750K |
| Mixed catering (events + some corporate) | 2x – 3x SDE | $400K SDE → $800K – $1.2M |
| Corporate contract catering, recurring clients | 3x – 4x SDE | $600K SDE → $1.8M – $2.4M |
| Institutional/government long-term contracts | 3.5x – 5x SDE | $800K SDE → $2.8M – $4M |
These ranges assume clean financials, a transferable kitchen arrangement, and a business that doesn’t collapse the moment the owner goes on holiday. Businesses at the top of each range have documented systems, trained staff, and client contracts in writing. Businesses at the bottom rely on the owner’s relationships and are sold largely on faith.
How Catering Is Different from Restaurant Valuation
If you’ve looked at restaurant business valuation, you’ll notice a different dynamic. Restaurants live or die by their lease and location — if the landlord won’t renew, there’s no business. Catering is more portable.
But catering has its own version of the same problem: client concentration. A restaurant losing a lease loses its location. A catering business losing its two biggest corporate accounts loses its revenue — and there’s no physical asset to hold the value.
This is why catering buyers spend a lot of time on client lists. They want to know:
- How many clients make up 80% of revenue?
- Are those clients on written contracts?
- How long have they been with you, and why would they stay with a new owner?
A catering business where three clients account for 70% of revenue will be priced at a discount regardless of its profitability, because the buyer can’t sleep at night.
The Factors That Drive Your Multiple Up or Down
Contract quality and client concentration
This is the biggest lever. A catering operation with fifteen corporate clients, each on a twelve-month rolling service agreement, is a fundamentally different risk proposition to one doing thirty weddings a year.
Multi-year contracts with automatic renewal are the gold standard — a buyer can underwrite the revenue. Event bookings don’t count. A full diary for December means nothing to a buyer assessing January through November.
I spoke with a Melbourne catering operator last year who had built a genuinely strong business — $1.6M in revenue, excellent reputation, clean margins. When the buyer’s adviser looked at the client list, the top two corporate accounts were month-to-month arrangements with no written agreement. The deal proceeded, but at 2.2x SDE instead of the 3x the owner had expected. Getting those two clients on twelve-month contracts beforehand would have added around $300,000 to the sale price. (The owner knew this. He’d just never got around to it.)
Your commercial kitchen arrangement
How you produce the food matters to buyers more than most owners expect.
- You own the premises: highest value, most security for the buyer.
- Long-term commercial lease: good — provides stability if the lease is assignable.
- Commissary or shared kitchen arrangement: buyer will scrutinise the terms carefully. A month-to-month arrangement is a risk.
If you’re on a short lease or using a commissary, either negotiate a longer-term agreement before you go to market, or price the risk into your expectations. A buyer’s lawyer will find this issue — it’s better for you to surface it first.
Equipment condition
Catering businesses are equipment-heavy: commercial ovens, refrigeration, blast chillers, delivery vehicles. Buyers look at the asset list and ask what needs replacing in the next three years.
If you’ve deferred maintenance or you’re running equipment that’s approaching end-of-life, expect either a price discount or a negotiated hold-back for replacement costs. A pre-sale equipment appraisal — available from commercial kitchen equipment dealers — gives you an accurate picture before a buyer’s accountant does it for you. Knowing the number yourself is almost always better.
Seasonality and revenue consistency
A business that earns 45% of its annual revenue in November and December is harder to value than one with consistent monthly income. Buyers can’t easily assess the underlying earnings when the seasonality is extreme.
Corporate catering operations — staff canteens, office morning teas, workplace lunch programs — tend to generate flat, predictable monthly revenue. That predictability is worth money. A corporate caterer and an event caterer with identical SDE figures will not sell for the same price. The corporate caterer will get a higher multiple because the buyer has more certainty about what they’re buying.
Who Buys Catering Businesses in Australia
The buyer pool depends on the size and type of business.
Under $500K SDE: Mostly individual buyers — hospitality operators, ex-chefs looking to own their own business, or lifestyle buyers. These buyers are working with their own capital (and often a bank loan), so they’re price-sensitive.
$500K–$1M SDE with corporate contracts: Trade buyers start to appear — larger catering companies looking to expand their client base or geographic footprint. These buyers understand the industry and move quickly when they find the right business.
$1M+ SDE with institutional contracts: Private equity-backed food-service platforms, corporate catering groups, and sometimes listed companies. These buyers pay the highest multiples but also have the most rigorous due diligence processes. Expect twelve to eighteen months from first conversation to settlement.
Government contract caterers — businesses providing catering to defence facilities, hospitals, or aged care — sit in a different category entirely. Long-term government contracts are rare and highly valued by institutional buyers.
Getting Your Catering Business Ready to Sell
Three things have the largest impact on your final price:
Get client contracts in writing. If you have corporate clients on handshake arrangements, formalise them now. A signed master services agreement — even a simple one — converts an unquantifiable risk into an asset.
Document your operations. Catering often runs on the owner’s head. A buyer who can’t see a recipe management system, a supplier contact list, or a documented kitchen procedure has to discount for the risk that the business relies on you personally. Write it down. The effort is usually one to two months. The valuation impact can be significant.
Normalise your financials. Make sure your last three years of accounts accurately reflect what the business earns, with clear add-backs. Engage an accountant who understands business sales, not just tax compliance — they’re different skill sets. Our guide on small business valuation methods explains what buyers and their accountants are looking for.
There are also pre-sale improvements that go beyond tidying up paperwork. Our guide on how to increase your business value before selling covers the structural changes that actually move the multiple.
If you want a starting estimate of what your catering business might be worth, use our free valuation calculator. If you’re ready to have a proper conversation about a sale process, get in touch — no obligation, and we don’t take on every mandate we’re offered.