How Do I Value My Business?

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 (817)725-7221 or email [email protected]. 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 Subscribe to The Deal Board Podcast YouTube Channel United Franchise Group Transworld Business Advisors Transworld on Linkedin Transworld on Facebook Call us — (888) 719-9098 Email us [email protected] Call Daren Bucklin at (503) 820-0063 or email [email protected] Call Aaron Wills at (817) 725-7221 or email [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices