Add-backs, and the ones that never survive diligence
An add-back is not a claim about what you spent. It is a claim about what a new owner would not spend, and it only counts if you can show it.
For owners one to three years out
Most businesses that go up for sale never sell.
The Exit Planning Institute puts it at 20 to 30% of businesses taken to market that actually close. The difference between the two groups is rarely the business. It is whether the owner did the work before the listing.
Source: Exit Planning Institute, State of Owner Readiness. Every number on this site carries its source, or it does not get published.
Free, five minutes, no financial figures
Find out where you actually stand
Eighteen questions across the three things that decide most outcomes. It does not estimate what your business is worth. It tells you what a buyer would discount, and names your two weakest items so you have something to act on.
01Business readinessCan the company be sold to someone who is not you?
02Owner readinessAre you ready, personally, for this to be over?
03Financial readinessDo the numbers survive a buyer's accountant?
Writing
Customer concentration, and the point where buyers start walking
At 40% of revenue in one customer, a buyer is not buying a business. They are buying a relationship they have never met.
Recurring revenue when you do not sell subscriptions
Buyers pay for revenue that arrives without being re-won. Very little of that requires a subscription business.
The number that comes before the valuation
What you need to net after tax and fees is more useful than what your business is worth, and almost nobody works it out first.
The thirty-day test
If you disappeared for thirty days, what would happen to revenue? Buyers are asking a version of this question the whole time, and the answer moves price more than any other single thing.
The year after
Owners who regret selling rarely regret the price. They regret not having decided what the business was for.
What happens when a buyer's accountant opens your books
They do not need to find anything wrong. They only need to be unable to verify what is right.
Why most businesses that go up for sale never sell
Only 20 to 30% of businesses taken to market actually close. The gap between the two groups is almost never the business itself.