There are certain phrases that tend to change the temperature of a deal. One of them is this: “The bank only needs this for compliance.” Whenever I hear that, I pay attention. Because sometimes what that phrase really means is: Please do not treat this like a serious economic review. Of course, not always. But … Continue reading The Phrase “The Bank Only Needs This for Compliance” Usually Means Someone Does Not Want Real Scrutiny

The buyer who says he is “being conservative” is often anything but. I hear that word often in transactions. Conservative. It sounds responsible. Measured. Disciplined. Bankable. But in deal language, “conservative” sometimes means: assuming revenue will stay where it is despite recent decline assuming payroll can be reduced without disruption assuming customers will remain after … Continue reading The Buyer Usually Says He Is Being Conservative Right Before Proving That He Is Not

One of the quiet truths in business valuation is this: The deal often starts sounding its best right before it starts coming apart. That is usually not a coincidence. When the facts are strong, people tend to be calm. The numbers speak for themselves. The explanations are consistent. The documents line up. But when support … Continue reading The Deal Usually Starts Sounding Better Right Before It Starts Falling Apart

This may sound blunt, but I believe it is true: The appraiser should not be the only adult in the room. Yet in some transactions, that is exactly what it feels like. By the time the valuation begins, the deal may already have a full emotional infrastructure built around it. The buyer wants it. The … Continue reading The Appraiser Should Not Be the Only Adult in the Room

I have heard some version of this many times: “The bank only needs the valuation for compliance.” That mindset causes real problems. Because when valuation is reduced to a procedural requirement, people stop asking what it is actually there to do. A valuation is not just a document for the file. It is one of … Continue reading “The Bank Only Needs It For Compliance”

One of the most persistent mistakes in small business transactions is the assumption that strong revenue must mean strong value. It does not. Revenue tells you the business is moving product, providing service, or generating customer activity. What it does not tell you, by itself, is whether the business is producing a durable, transferable economic … Continue reading Revenue Is Not Value

When people talk about emotion in a transaction, they usually focus on the seller. And yes, sellers are often emotionally attached. It is their company. Their history. Their sacrifice. Their identity. But the seller is not the only one bringing emotion to the deal. The buyer often is too. In fact, in many small business … Continue reading The Seller Is Not the Only One Emotionally Attached to the Deal

This is one of the hardest concepts for people outside valuation to accept: A business can be profitable and still be overpriced. Those two things are not contradictory. They happen together all the time. A company may show a profit. It may have loyal customers. It may have a long operating history. It may even … Continue reading A Profitable Business Can Still Be Overpriced

There are many red flags in business valuation. But one I never ignore is this: when the adjustments do all the work. If the original financial statements tell one story, and the deal only works after a long series of aggressive add-backs, assumptions, and “one-time” explanations, I slow down immediately. Because that is where a … Continue reading After 10,000 Valuation, Here is the 1 Red Flag I Never Ignore

One of the reasons deals become difficult is that the key parties often use the same word—value—to mean very different things. And that creates problems quickly. Buyers often confuse value with possibility. They see upside, improvements, cross-selling opportunities, better management, or growth they believe they can create. Some of that may be real. But fair … Continue reading What Buyers, Brokers & Lenders Each Get Wrong about Value