🧯 Deadly Sin: Misusing Rules of Thumb

“3x earnings” is not a valuation.
“4x SDE” doesn’t make it true.
Even “1x revenue” is dangerous without real analysis.

🔍 Rules of thumb are starting points, not conclusions.

Real valuations account for:

• Normalized free cash flow
• Working capital needs
• CapEx requirements
• Risk-adjusted discount rates

📌 If the math ends at “we used a rule of thumb,” the appraisal may not meet SBA standards.