An auto shop was under contract at $850K based on $175K in cash flow. But we found: ❌ 2 sons working full-time, unpaid❌ Equipment over 15 years old—no CapEx budget❌ Addbacks included gas, phone, and home office Adjusted free cash flow? ~$65KTrue value? ~$440K ✅ Lender restructured. ✅ Buyer avoided overpaying.

 🚗 Auto repair shop valuations often break down when they: Ignore technician wages for family labor Miss hidden CapEx (lifts, tools, diagnostic equipment) Use unadjusted revenue during boom years Underestimate customer churn or brand dependency 📌 Normalizing for labor and reinvestment is critical. A $90K free cash flow that ignores $60K in replacement labor… isn’t … Continue reading 🧠 Valuation Insight: Auto Shops Run on More Than Oil

📘 Just released: Our HVAC Business Valuation Checklist Covers:✅ CapEx + fleet replacement✅ Owner labor vs. market comp✅ Seasonality adjustments✅ Service vs. install revenue✅ FMV vs. book value of equipment 📩 Click here to grab your copy.

A $675K HVAC valuation assumed $125K in annual free cash flow. But: ❌ 62% of revenue came from one unusually hot season❌ Owner performed 100% of installs❌ No service contracts or recurring revenue❌ No CapEx adjustment for aging truck/tools We normalized to ~$65K in sustainable cash flow.True value: ~$375K. Lender avoided major exposure. 📌 Heat … Continue reading ⚠️ Red Flag Case Study: One Truck, One Hot Summer

 HVAC company valuations often miss the mark because they: Ignore seasonal swings Understate CapEx for trucks, tools, or tech Treat one-time commercial jobs as recurring Fail to adjust for technician wages or owner field labor 📌 Cash flow must reflect recurring maintenance—not a spike from one summer heat wave. ✅ Normalize earnings, fleet replacement, and … Continue reading 🧠 Valuation Insight: HVAC Cash Flow Needs a Tune-Up

📝 New for SBA lenders: Our Dental Practice Valuation Checklist Covers: ✅ Owner comp normalization✅ Goodwill transferability test✅ Hygiene/associate production support✅ Adjusting for insurance reimbursements and patient churn 📩 Click here to grab your copy.

A dentist claimed $275K in seller’s discretionary earnings and priced the practice at $1.5 million. But: ❌ No associate❌ No staff contracts❌ 94% of production came from the owner❌ Buyer was newly licensed We adjusted for owner/operator comp + patient attrition risk. True value: ~$750K✅ The lender restructured. ✅ The deal still closed. 📌 Cash … Continue reading ⚠️ Red Flag Case Study: The Solo Producer Problem

🦷 Dental practices often report strong cash flow—but is it sustainable after the seller leaves? Key issues: Owner-doctor usually drives 90%+ of production No associate or hygiene team in place Valuation assumes patients will stay with a new, unknown provider 📌 If the goodwill is personal, not enterprise, it doesn’t transfer—and neither should the value.

🧾 We built a quick-reference Restaurant Valuation Checklist for SBA lenders. It covers:✅ Addbacks to be skeptical of✅ Owner comp normalization tips✅ Equipment + CapEx traps✅ Red flag language in appraisal reports 📩 Click here to grab your copy.

A $750K restaurant valuation relied on “owner’s discretionary cash flow” of $185K. But: $45K = family payroll not expensed $18K = underreported delivery fees $22K = ‘miscellaneous’ addbacks with no backup $35K = no market salary for the full-time owner Real FCF: ~$65KReal value: closer to $275K 📉 The lender caught it in time and … Continue reading ⚠️ Red Flag Case Study: The Phantom $120K