A plumbing company was priced at $880K based on $240K in SDE. But: ❌ Owner was the only licensed plumber—also did estimates❌ Two vans were leased personally and excluded from financials❌ Addbacks included home utility bills and family cell phones❌ No recurring contracts—100% project-based ✅ Adjusted FCF: ~$75K✅ Revised value: ~$460K with licensing and labor … Continue reading ⚠️ Red Flag Case Study: One Man, One Van

 🚿 Plumbing business valuations can leak value when: The owner is the master plumber + lead tech + estimator Revenue comes from one-time jobs, not recurring service Tools, vans, and gear are left out of CapEx planning Licensing isn't transferable or not disclosed 📌 A business that depends on one person’s wrench isn’t enterprise value.

📘 Just released: Our Electrical Contractor Valuation Checklist for SBA lenders Includes:✅ Owner/operator labor & licensing review✅ Project vs. recurring revenue normalization✅ CapEx and truck/tool inventory✅ Customer concentration and contract risk✅ SBA-compliant normalization guidance 📩 Click here to grab your copy.

This contractor claimed $285K in "cash flow" and wanted $925K. But: ❌ Owner ran all estimates and handled complex service calls❌ Two trucks were leased personally—not on books❌ Revenue was inflated by a one-time hotel project❌ No apprentice training, no transition team ✅ Adjusted cash flow: ~$85K✅ Revised value: ~$520K after project normalization + labor … Continue reading ⚠️ Red Flag Case Study: Shocking Adjustments

 ⚡ Electrical contractor valuations often short-circuit when they: Use project-based income without smoothing Ignore owner’s labor as lead estimator/technician Omit CapEx for trucks, lifts, or diagnostic tools Assign goodwill without considering licensing transfer 📌 If you wouldn’t wire a building without a plan, don’t underwrite one without normalization.

📘 Just released: Our Fitness Centers & Gyms Valuation Checklist for SBA lenders Includes:✅ Owner-labor replacement logic✅ Recurring vs. one-time revenue sanity checks✅ CapEx cycles for key equipment✅ Addbacks to question (personal trainer, meal prep, phone)✅ SBA guidance for member-based businesses 📩 Click here to grab your copy.

This boutique gym priced at $795K based on $215K SDE. But: ❌ 72% of clients joined after a Groupon campaign❌ Owner taught 80% of classes—no replacements lined up❌ No CapEx for equipment or software❌ Addbacks included personal training certifications + phone Adjusted cash flow: ~$110KFinal valuation: ~$435K 📌 Valuing sweat equity without infrastructure? That’s a … Continue reading ⚠️ Red Flag Case Study: Strong on Paper, Weak on Infrastructure

 💪 Gym and fitness studio valuations often flex the wrong muscle: Membership spikes aren’t sustained post-New Year Owner is the head trainer, brand, and salesperson Equipment is outdated, leased, or seller-retained Addbacks assume all labor is variable (it’s not) 📌 Normalize for reality, not January optimism.

📘 Just released: Our Daycare & Childcare Center Valuation Checklist Includes:✅ Owner/operator role normalization✅ Licensing, staff ratios, and facility review✅ Enrollment risk & age group breakdown✅ Addback challenges in family-owned centers✅ SBA tips for valuing regulated service businesses 📩 Click here to grab your copy.

A center priced at $725K claimed $185K in cash flow. But: ❌ Owner taught, ran the office, and handled enrollments❌ Facility at capacity—but underlicensed❌ No employee handbook, SOPs, or backup staff❌ Addbacks included child snacks, family wages, and lease perks Adjusted FCF: ~$75KTrue value: ~$410K with seller support + licensing review 📌 Lenders saved the … Continue reading ⚠️ Red Flag Case Study: All Smiles, No Structure