Posts by Jeff Erlewine
Why Financial Forecasting is Critical for Business Growth and a Successful Exit
Financial forecasting is an essential tool for business owners looking to maintain stability, drive growth, and prepare for the future. By projecting revenues, expenses, and cash flow, business leaders can make informed decisions, mitigate risks, and optimize their financial strategies. Whether preparing for expansion, securing financing, or planning an eventual sale, having a clear financial…
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 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…
Read MoreHow 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 MoreThe Role of Working Capital in M&A Transactions
Working capital is a fundamental component of mergers and acquisitions (M&A) transactions, influencing deal valuation, purchase price adjustments, and post-closing operations. Buyers and sellers must align on how working capital is defined, measured, and transferred to ensure a fair and smooth transaction. Misunderstandings around working capital can lead to post-closing disputes and unexpected financial impacts,…
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 MoreWhen to Start Planning Your Business Sale: Timing Matters More Than You Think
One of the most common questions business owners ask is, “How far in advance should I start planning for a sale?” The answer: earlier than you think. While the actual sale process may take six to twelve months once you’re actively in the market, the work that drives valuation and reduces deal friction often starts…
Read MoreThe Role of Tangible and Intangible Assets in Business Value
When determining the value of a business, buyers look well beyond revenue and profitability. Assets—both tangible and intangible—play a critical role in shaping how your business is perceived and priced. While tangible assets offer a clear sense of what the buyer is physically acquiring, it’s often the intangible elements that drive premium valuations. Understanding both…
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