In mergers and acquisitions (M&A), valuation is a strategic linchpin, not merely a mathematical exercise. A well-executed valuation aligns buyer and seller expectations, secures financing, and drives deal closure. This white paper outlines advanced strategies to optimize M&A outcomes, integrating robust modeling, scenario planning, and due diligence preparation, supported by current industry insights and best … Continue reading Valuation Strategies for M&A Success
business valuation explained
🧠 Fair Market Value vs. Strategic Value
Not all valuations are created equal.There’s a critical difference between fair market value and strategic value—especially in SBA 7(a) lending. ✅ Fair Market Value assumes a hypothetical buyer with no special motivations.🤝 Strategic Value reflects what a specific buyer might be willing to pay for their own reasons (synergies, territory, IP, etc.). 💡 If you’re … Continue reading 🧠 Fair Market Value vs. Strategic Value
🎁 Resource Drop: Customer Concentration Discount Guide
📘 Our Customer Concentration Discount Guide gives lenders the tools to adjust for risk properly. Includes: ✅ Industry-adjusted risk levels✅ Sample discount scenarios✅ How to discuss with borrowers 📩 Click here to grab your copy.
📊 Case Study: 1 Customer = 72% of Revenue
We reviewed a $1.7M business valuation of a manufacturing firm based on smooth cash flow. But then we asked: Who are the customers? How much of revenue comes from the top one? Answer: 72% 😳 We applied a risk discount. Value dropped ~30%. Buyer and lender restructured. Deal closed—with protection. 📌 If one customer leaves … Continue reading 📊 Case Study: 1 Customer = 72% of Revenue
🧠 Sin Spotlight: The 1-Customer Problem
🧯 Deadly Sin: Ignoring Customer Concentration Risk If one client makes up 30%+ of revenue, your cash flow has a single point of failure. Yet appraisals often: ❌ Ignore this risk❌ Apply normal multiples❌ Assume “it’ll be fine” 📌 Appraisers and SBA lenders must adjust value—or structure around it—when concentration threatens stability.
The Impact of Key Person Loss on Business Valuation in the SBA Loan Context
The sudden death or departure of a key individual—often the founder or owner—can devastate a small business’s viability and value. When operations, customer relationships, or specialized knowledge hinge on a single person, the loss can shift a business from a going concern to distress. This white paper examines the financial, operational, and valuation consequences of … Continue reading The Impact of Key Person Loss on Business Valuation in the SBA Loan Context
Why the Harmonic Mean is Best for Analyzing Financial Ratios
When analyzing business valuation multiples—such as price-to-revenue (P/R) or price-to-EBITDA—choosing the right type of average is essential to avoid misleading conclusions. While many professionals default to the arithmetic mean (a simple average), a more accurate and meaningful metric for ratios is the harmonic mean. This article explains why, using real-world examples and straightforward explanations for … Continue reading Why the Harmonic Mean is Best for Analyzing Financial Ratios
🎁 Resource Drop: Franchise Valuation Checklist
📘 We created a Franchise Valuation Checklist for SBA lenders and analysts. Includes: ✅ Common franchise-specific red flags✅ Required adjustments✅ Royalty treatment✅ Risk factors 📩 Click here to grab your copy.
📊 Case Study: The Royalty Black Hole
🍕 A franchise showed $180K in free cash flow. But the financials didn’t include: 8% royalty 3% marketing fee Real FCF? ~$100KBuyer was overpaying—lender got nervous—deal barely closed. Don’t let brand strength blind you to contract risk.
🧠 Sin Spotlight: The Franchise Valuation Trap
🍔 Not all franchise deals are created equal. We’ve seen appraisals that: Apply generic multiples without royalties Ignore franchisor contract risks Overstate goodwill based on brand alone 📌 SBA-compliant appraisals must adjust for: ✅ Royalties✅ Franchise fees✅ Transfer restrictions✅ Control limitations The brand has value—but the buyer’s control of that value can be limited. And … Continue reading 🧠 Sin Spotlight: The Franchise Valuation Trap
Highland Global Business Valuations 