Posts by Jeff Erlewine
The Power of Clean Financial Statements: A Stronger Business, A Smoother Sale
Accurate and well-organized financial statements are fundamental to running a successful business. Whether managing day-to-day operations, securing financing, or preparing for a sale, clean financials provide transparency, build trust, and support better decision-making. Disorganized or inaccurate records, on the other hand, create uncertainty, slow down processes, and can cost a business money in valuation and…
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 MoreSelecting the Right Advisor: Comparing Business Brokers, M&A Advisors, and Investment Bankers
When selling a business, choosing the right advisor can make a significant difference in the outcome of the transaction. Business brokers, M&A advisors, and investment bankers all facilitate business sales, but their expertise, process, and target markets vary widely. Understanding the differences between these professionals is critical for business owners looking to maximize value, streamline…
Read MoreHow to Increase the Value of Your Business Before a Sale
Selling a business is a major financial and strategic decision, and the steps taken before going to market can significantly impact valuation and deal outcomes. Buyers evaluate businesses based on profitability, risk, and growth potential, and sellers who proactively address these areas are more likely to command a higher purchase price and close deals efficiently.…
Read MoreWhy 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 More