Posts by Jeff Erlewine
How Often Should You Value Your Business?
Understanding the value of a business is essential for decision-making, yet many owners only seek valuations when they are ready to sell. While that is a critical moment, valuation is not just about an eventual exit—it is a tool for strategic planning, financing, tax planning, and measuring overall business health. So how often should a…
Read MoreHow Market Conditions Influence Business Valuation—and What You Can Do About It
Business valuation isn’t determined in a vacuum. While internal factors like financial performance, customer concentration, and recurring revenue are critical, market conditions play a major role in how your business is perceived—and what a buyer is ultimately willing to pay. Interest rates, buyer demand, capital availability, and industry trends all shape the environment in which…
Read MoreHow Business Value is Determined: Key Drivers in M&A
Understanding the value of your business isn’t just a financial exercise—it’s a fundamental step in strategic decision-making. Whether preparing for a sale, seeking investment, or planning long-term growth, business valuation is a nuanced process influenced by financial performance, market conditions, and intangible factors. Ultimately, valuation translates potential into price, ensuring that business owners, investors, and…
Read MoreFinancial Statement Normalization in M&A: Understanding Add-Backs and Adjustments
When preparing a business for sale, one of the most critical steps is ensuring that financial statements accurately reflect the company’s true earning potential. Many private businesses have financials that include discretionary expenses, owner-related costs, or one-time charges that do not reflect the company’s ongoing operations. This is where financial statement normalization comes into play.…
Read MoreEssential Marketing Materials for Selling a Business
Selling a business requires more than just finding an interested buyer. A well-executed sale process depends on professionally prepared marketing materials that provide prospective buyers with the right level of information at the right time. These materials help generate interest, establish credibility, and guide buyers through their evaluation of the opportunity. Without them, a business…
Read MoreEarnouts in M&A: A Guide to Structuring Performance-Based Payouts
Earnouts are a common mechanism in M&A transactions that help bridge valuation gaps between buyers and sellers. By tying a portion of the purchase price to the future performance of the business, earnouts provide an opportunity for sellers to achieve a higher total payout while mitigating risk for buyers. While earnouts can create alignment between…
Read MoreDetermining a Fair Purchase Price in M&A: Key Considerations
One of the most critical aspects of any merger or acquisition is determining a fair purchase price. While buyers and sellers may have different perspectives on valuation, the ultimate goal is to establish a price that reflects the company’s financial health, growth potential, and risk profile. A well-supported valuation helps facilitate a smoother negotiation process…
Read MoreAsset Sale vs. Stock Sale: Understanding the Deal Structure
When selling a business, one of the most fundamental structural variables is whether the transaction will be an asset sale or a stock sale. This decision carries significant financial, legal, and tax implications, influencing the overall outcomes for both buyer and seller. While both asset and stock sales ultimately transfer the same core components of…
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