How Do I Value My Business?

The Deal Board

Andy and Jessica welcome you to another episode of The Deal Board Podcast. This week, they are discussing a recurrent and always important topic: valuation. Reaching an accurate value for their business is the primary concern of many business owners, and is a crucial element to consider while thinking about exiting a business.

In this conversation, Andy and Jessica dive deep into add-backs and share their expert advice to use them favorably for your valuation process.

Listing of the week: Aaron Wills is selling an HVAC company that has been in business for more than two decades The real estate is owned by the business and it has two income-producing properties. The asking price is $800,000 for the business and the real estate is just over $1 million. Call Aaron [phone] or email [e-mail].

Key takeaways:

[1:25] How much money does your business make?

[1:47] Jessica discusses the two earning amounts you should consider while starting a valuation: EBITDA and SDE.

[3:10] Different ways of minimizing your earnings to pay less taxes.

[4:18] Transworld’s philosophy is a little conservative, and Jessica and Andy explain why.

[7:31] Things that, by definition, are add-backs: The first one is INTEREST.

[8:04] TAXES

[9:12] APPRECIATION/AMORTIZATION

[10:36] OFFICER SALARY (one)

[11:11] W2 SALARY

[11:40] OWNER PERKS

[13:52] TELEPHONE and CELL PHONE EXPENSES

[15:32] REAL ESTATE

[19:34] PAYROLL

[20:40] DONATIONS

[21:32] DUES and SUBSCRIPTIONS

[22:45] BAD DEBT

[23:40] ONE-TIME NON-RECURRING EXPENSES

[24:51] LOSING or ADDING A BIG CUSTOMER

[25:42] EQUIPMENT LEASES

[26:07] PENALTIES

[26:34] Check large numbers!

[27:15] Jessica discusses adding personal expenses.

[33:30] Deal of the week: Daren Bucklin (Portland) sold a vocational school that has been in business since 2008, training front-line caregivers. The company was sold to a large University looking forward to expanding, for $900,000.

[35:26] Listing of the week: Aaron Wills is selling an HBAC company that has been in business for more than two decades The real estate is owned by the business and it has two income-producing properties. The asking price is $800,000 for the business and the real estate is just over $1 million.

Mentioned in this Episode:

The Deal Board Podcast

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United Franchise Group

Transworld Business Advisors

Transworld on Linkedin

Transworld on Facebook

Call us — [phone]

Email us [e-mail]

Call Daren Bucklin at [phone] or email [e-mail]

Call Aaron Wills at [phone] or email [e-mail]

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