SBA 7a appraisal

📚 Valuation Myth: Goodwill Means Higher Value

~ Certified Business Appraiser

The Myth:If the balance sheet shows goodwill, the company must be worth more. The Reality:Goodwill on the balance sheet is often a plug from prior transactions — not an independently verified or updated measure of value. It doesn’t guarantee current goodwill exists or that it’s monetizable. Why It Matters:Relying on outdated or accounting-based goodwill rather … Continue reading 📚 Valuation Myth: Goodwill Means Higher Value

📚 Valuation Myth: Accrual Profit = Cash Flow

~ Certified Business Appraiser

The Myth:Accrual-based net income shows the company’s cash-generating ability. The Reality:Accrual accounting records revenue when earned and expenses when incurred, not necessarily when cash moves. A business can show strong accrual profits while suffering from cash shortages due to unpaid receivables, rising payables, or heavy CapEx needs. Why It Matters:Valuation relies on sustainable free cash … Continue reading 📚 Valuation Myth: Accrual Profit = Cash Flow

I’ve Been Around a Long Time

~ Certified Business Appraiser

One of the unexpected milestones in your career is realizing your work has become “reference material” — sometimes without attribution.I recently discovered a years-old blog post by a competitor built directly from one of my copyrighted books. No credit, no permission; just copy and paste.I suppose when original thinking is hard, borrowing someone else’s work … Continue reading I’ve Been Around a Long Time

The Longer You’re In Business

~ Certified Business Appraiser

The longer you’re in business, the more you realize: authority doesn’t need to argue.I recently heard that someone I’ve never met — a competitor in name only — chose to disparage me at a professional event. Not based on my work, not on my results, but on their perception of my role and worth.After 25+ … Continue reading The Longer You’re In Business

📚 Valuation Myth: CPA = Business Valuation Expert

~ Certified Business Appraiser

The Myth:If my CPA says it’s worth $X, that’s all I need. The Reality:While CPAs are excellent at accounting, business valuation requires specialized training, professional standards, and experience in applying appraisal methodologies. Not all CPAs are qualified to perform formal, credible valuations. Why It Matters:Relying on an unsupported CPA estimate could lead to regulatory issues, … Continue reading 📚 Valuation Myth: CPA = Business Valuation Expert

📚 Valuation Myth: Owner Dependency Isn’t a Big Deal

~ Certified Business Appraiser

The Myth:The business is more valuable because the owner is essential. The Reality:Actually, the more dependent a business is on a single owner, the less transferable — and therefore the less valuable — it becomes. Buyers seek sustainable operations without heavy reliance on one person. Why It Matters:Owner-centric businesses are riskier and command lower multiples, … Continue reading 📚 Valuation Myth: Owner Dependency Isn’t a Big Deal

📚 Valuation Myth: Higher Revenue = Higher Value

~ Certified Business Appraiser

The Myth:A business with high revenue is automatically valuable. The Reality:Top-line revenue means little if margins are thin, expenses are high, or the business consistently burns cash. Buyers and appraisers focus on free cash flow — the true economic benefit. Why It Matters:Focusing solely on revenue can lead to wildly inflated expectations or pricing errors. … Continue reading 📚 Valuation Myth: Higher Revenue = Higher Value

📚 Valuation Myth: Debt Automatically Destroys Value

~ Certified Business Appraiser

The Myth:If the business has debt, it must be worth less. The Reality:Enterprise value reflects the total value of the business’s operations — debt and equity combined. Existing debt doesn’t reduce value; it affects how value is divided between lenders and owners. Why It Matters:Confusing debt’s impact on equity with business worth can lead to … Continue reading 📚 Valuation Myth: Debt Automatically Destroys Value

📚 Valuation Myth: Higher Growth = Higher Value

~ Certified Business Appraiser

The Myth:Fast-growing businesses are automatically worth more. The Reality:Growth Without Profit = Burn Rate. Growth without profitability is just burning cash faster. Buyers and appraisers look for profitable and sustainable growth — not just high top-line expansion. Why It Matters:Unprofitable growth can lead to funding shortfalls, increased risk, and valuation discounts. Practical Tip:Focus on growing … Continue reading 📚 Valuation Myth: Higher Growth = Higher Value

📚 Valuation Myth: SBA Approval Means the Valuation is Right

~ Certified Business Appraiser

The Myth:If the SBA accepted the valuation, it must be accurate. The Reality:SBA loan approval primarily ensures that minimum standards are met — not that the valuation is free from errors or aggressive assumptions. Compliance doesn’t always equal credibility. Why It Matters:Lenders and buyers who rely blindly on “approved” valuations can expose themselves to hidden … Continue reading 📚 Valuation Myth: SBA Approval Means the Valuation is Right