Small Business Sale Norms – The Asset Purchase Agreement
Blog – Asset Purchase Legal Structure When considering the sale or acquisition of a small business, the structure of the deal plays a critical role in defining its tax treatment, liability exposure, ease of execution, and post-closing dynamics. While larger, more complex transactions often involve stock sales or mergers, the overwhelming majority of small business […]
Preparing to Sell Your Business – Four Essential Steps
Blog – Preparing_to_Sell_Your_Business After participating in hundreds of business acquisitions and divestitures over my 25-year career, I’ve developed a comprehensive understanding of what separates successful exits from disappointing ones. The difference often lies in methodical preparation rather than luck or market conditions. If you’re thinking about selling in the next few years, these strategies can […]
Other Key Factors in Valuing a Small Business for Sale
Understanding the Elements That Drive Business Valuation As the final part in this series of valuing a small business for sale, it is important to recognize additional factors that significantly influence buyer demand and final valuation. 1. Business Longevity and Track Record Buyers tend to favor well-established businesses with a proven track record. A longer […]
Seller Discretionary Earnings and Business Sales Price
Understanding Seller Discretionary Earnings (SDE) in Business Valuation Seller Discretionary Earnings (SDE) play a critical role in determining the fair market value of a small business. As a fundamental financial metric, SDE provides valuable insights into a company’s financial health and attractiveness to potential buyers. Additionally, the predictability of cash flow significantly influences valuation. Business […]
How Are Small Businesses Valued for Sale?
Historical Cash Flow Analysis and Seller Discretionary Earnings (SDE) When assessing the value of a small business, analyzing historical cash flow is a fundamental approach. This method provides buyers with insight into the company’s annual revenue generation and often justifies a premium purchase price for businesses with a proven track record of success. However, many […]
