HomeListingsBuyersSellersAboutCompany
Kirk F MacKenzie
Sellers

Initial Consultation

Initial Meeting

The process begins with a meeting, typically at your business, to learn about each other and discuss your business opportunity in detail. The more information received at this stage, the smoother things will go downstream. Information provided is kept in strict confidence and shared only in accordance with your instructions.

Valuation

Based on the information provided, we will discuss a listing price for your business. It is important to be realistic. If your price is too high, qualified buyers may be scared away or not make offers for fear of offending you. You will lose time. And the longer the business is on the market, the more negative the "word on the street" becomes, and the greater the chance your employees, suppliers, lenders or customers will find out. There are numerous methods for valuing a business. Here are a few.

  1. Earnings Multiple. This method values a business as a multiple of earnings. It can also be thought of as the number of years to payback, or as a Price/Earnings Ratio. For example, a multiple of 4X can be thought of as 4 years to payback, or as a P/E Ratio of 4.0. Commonly used measurements of earnings are ANOI, SDE, and EBIDTA. ANOI is an abbreviation of Adjusted Net Operating Income. It is calculated by making appropriate add-backs and adjustments to the NOI reported on your income statements and/or federal tax returns. SDE stands for Seller's Discretionary Earnings. It is synonymous with ANOI. EBIDTA stands for Earnings Before Interest, Depreciation, Taxes, and Amortization. It often calculates to the same value as ANOI, but not necessarily so.
  2. Revenue Multiple. This method values a business as a multiple of revenue. The multiple can be based on annual or monthly sales. For example, an annual multiple of 0.4 is equal to a monthly multiple of 4.8.
  3. Assets & Equipment. Assets and equipment are typically included in the purchase price. When the assets are significant, the asset value and income value are summed to calculate a purchase price.
  4. Inventory. Inventory may or may not be included in the purchase price. It will be valued on the day possession changes hands. The buyer must have sufficient down payment to buy both the business and the inventory.
FEATURED LISTINGS