Aurora Business Brokers Firm can introduce you to a valuation partner. Build a valuation discussion around earnings a buyer can verify, rather than revenue alone or the amount you draw from the business.
A draw is not automatically an earnings adjustment
Moving cash to your personal account does not establish the company’s operating cash flow. Start with the profit and loss statement, tax returns and balance sheet.
Separate financing proceeds and asset sale income from normal trading results. A business can have money in the bank that did not come from recurring operations.
Give each addback a replacement question
Owner compensation, personal expenses and unusual costs may need adjustment. The question is what a buyer must actually spend to keep the company running.
If you supervise the staff and sell the work, a replacement salary may belong in the forecast. Removing your whole pay without that cost can inflate the valuation.
Use the right earnings view for the operation
Seller’s discretionary earnings can describe the benefit to one working owner. Adjusted EBITDA is more useful when management compensation remains a real operating cost.
Your valuation partner should explain the measure used, the records behind it and the risks affecting price. An opinion of value is a starting point for negotiation, not a guaranteed offer.