When business owners hear about “valuation,” two acronyms often come up: SDE (Seller’s Discretionary Earnings) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Knowing the difference between them helps you pick the right metric—and avoid undervaluing or overpromising. Below is a basic “Business Valuation 101” explanation of both, when...
If you are preparing to sell your business, the earlier you clean up your financials, the more confident buyers will feel—and the more you can command in price. These six reports are almost always among the first documents that potential buyers or their advisors request. The...
Even if your business feels stable, there are certain events and warning signs that mean your valuation, what a buyer would pay you, might be out of date. Recognizing them before a sale, gives you time to make changes and potentially increase the value of...
Finally, 2023 is in the books. Good riddance. If your goal is to build a more valuable company in 2024, here are some New Year’s resolutions to consider: Stop chasing revenue.A bigger company is not necessarily a more valuable one if the extra sales come from products and...
When potential acquirers first evaluate your business, most will quickly categorize it into a specific industry. This initial classification can significantly impact the value they place on your business. Some industries are inherently perceived as more valuable than others, and if your business is placed...
When it comes to financing the growth of your business, you may find yourself facing a difficult choice between the lesser of two evils. Selling shares in your business can provide an immediate cash injection, but it means giving up some of your valuable equity...
Picture a magic slot machine. Each time you pull the arm, you make back a multiple of whatever you wagered. How much time would you devote to cranking that arm? When it comes to the value of your business, you can make many bets, but only one...
Have you ever wondered why some athletes struggle to transition from player to coach? This challenge isn’t just limited to sports; it’s a critical shift that many business owners need to make to build a valuable business. Take Wayne Gretzky, for example. Despite being arguably, the...
As a business owner, you’re likely proud of the results you’ve achieved in the past, but when it comes to the value of your business, your future is critical. That’s why your growth potential is one of eight factors that drive the value of your business. One...
Most founders aim to boost sales, but prioritizing top-line growth can attract low-quality revenue, potentially reducing your company’s value. To an acquirer, revenue quality varies. They prioritize future revenue predictability, valuing recurring income from contracts and subscriptions higher than one-off sales. Consequently, firms with recurring revenue...
