A business owner gets quoted $12,000 for a valuation, calls another firm and gets quoted $1,800 for what sounds like the exact same thing, and walks away convinced somebody is trying to rob him. That reaction is the most common one I see, and it is almost always based on a misunderstanding. A business valuation in the United States costs anywhere from nothing to more than $50,000, but most small business owners preparing to sell will pay somewhere between $0 and $8,000. The e

Most owners come to me already wrong about what their business is worth. Not by a little. By a factor of two, sometimes three. And when I ask where the number came from, the answer is almost always the same: somebody on the internet told them an industry multiple. Here is the problem. A business valuation multiple by industry is a number buyers and lenders use as a starting point, calculated by dividing comparable sale prices by the seller's earnings to produce an SDE or EBIT

Most business owners who ask me this question already have a number in their head. Almost always, that number is wrong by 30 to 50 percent. That is not a knock on the people asking. It is human nature. You built the thing. You know what it cost you in time, money, and lost weekends. You assume that effort translates into market value. It does not. Here is the honest answer. If you run an owner-operated business with under $2 million in earnings, your sale price is going to la

A confidential information memorandum (CIM) is a detailed document prepared by a business broker or M&A advisor to present a business for sale to qualified, pre-screened buyers. It covers financial performance, operations, market position, growth potential, and the overall story of the business in a format designed to help a serious buyer understand exactly what they would be acquiring.

Last year I sat across the table from a guy who built a $1.2 million revenue premium hair product company over 18 years. Good business. Solid customer base. Repeat revenue from service contracts. He told me he wanted $3.5 million for it. When I asked how he arrived at that number, he said his accountant mentioned that businesses sell for "five or six times earnings." That accountant was thinking of mid-market companies with professional management teams and $20 million in rev