EBITDA stands as the prevalent yardstick for evaluating a company’s earnings within the middle market. This metric streamlines comparative analyses for buyers seeking swift valuations. The bedrock of many valuation methodologies lies in a multiple of earnings, with EBITDA reigning as the prime measure. Once the EBITDA of a business is identified, its value is […]
Seller’s Discretionary Earnings (SDE) stands as a pivotal gauge of a business’s financial prowess and remains the quintessential benchmark for quantifying cash flow within the realm of small business valuation. SDE empowers potential buyers with a swift means to juxtapose and assess two companies with precision for valuation purposes. The SDE formula encompasses: Pre-tax net
Distinguishing between SDE (Seller’s Discretionary Earnings) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is crucial when assessing your business’s worth. So, which metric should you prioritize for valuing your enterprise? SDE and EBITDA stand as distinct approaches for gauging a business’s profitability or cash flow. The pivotal contrast can be summarized as follows:
If you’re a typical business owner, you’ve structured your company operations to minimize taxes. You might have granted yourself and your family various perks, employed relatives, and written off business-related expenses — all of which contribute to lower earnings and consequently reduce your business’s overall value. These practices, along with others, are aimed at keeping
Adjusting Financial Statements: A Complete Guide Read More »
What are the typical charges for brokers and M&A advisors? How can you ensure their interests align with yours through the fee structure? Could the fee arrangement with a broker or M&A advisor lead to bias or conflicting interests with you, the business owner? Here’s a breakdown of standard fees for selling a business based
You’ve made the call to sell your business. Now what’s next? After deciding to sell, your first move is to bring in a business broker or M&A advisor. These professionals come with different types of engagement agreements. But which one suits your business sale? There are three main agreement types to consider: Exclusive Agreement: This
A Confidential Information Memorandum (CIM) is a carefully crafted overview of your business. It’s shared with pre-qualified buyers who are keen on acquiring your company. The CIM efficiently tackles buyer inquiries, streamlining the process and saving valuable time. It covers essential details such as company history, product and service offerings, licensing, competition, financial overview, operations,
Handing over the keys at the closing isn’t sufficient. What you truly need is a well-crafted strategy—an exit plan strategy. An exit plan strategy is more than just a term; it’s a meticulously designed plan to guide your business’s departure. While the specifics of exit plans may vary, they all share key components. Three essential
Business Exit Plan & Strategy Checklist – A Complete Guide Read More »
To unlock the utmost potential of your business, it becomes paramount to comprehend the desires of prospective business buyers—and then transform those aspirations into reality. A thriving business often calls for more than just a solo act; buyers are drawn towards well-established infrastructures and capable management teams. The journey from birthing a business to nurturing
As a triumphant entrepreneur, your journey has been shaped by the harmonious interplay of ambition and practicality. Now, at this pivotal juncture, the question looms large: Forge ahead with unwavering resolve, or consider a strategic transition? The specter of rivals potentially wresting control of your enterprise weighs heavily on your mind – a decisive blow
Crossroads: Deciding to Sell Your Business vs. Doubling Down Read More »
