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

When an SBA valuation comes in below the purchase price, many people immediately assume something went wrong. Often, what actually happened is much simpler: the valuation applied discipline to a number that was built on momentum. Here are 10 common reasons a valuation may not support the agreed price: 1. Earnings are not strong enoughThe … Continue reading 10 Reasons an SBA Valuation Comes in Below the Purchase Price

People spend a lot of time arguing about purchase price. But in many small business acquisitions, that is not the most dangerous number in the room. The most dangerous number is the one underneath it: the cash flow everyone assumes is there. That is where bad deals hide. Not in the headline number. Not in … Continue reading The Most Dangerous Number in a Business Acquisition is Not the Purchase Price

One of the most common things I hear when a transaction starts to wobble is this: “The valuation killed the deal.” In my experience, that usually is not true. The valuation did not create the problem. It revealed it. If a business cannot support the agreed purchase price based on its normalized earnings, risk profile, … Continue reading The Valuation Didn’t Kill the Deal. The Price Did.