A cleaning company priced at $395K claimed $125K in cash flow. But: ❌ Owner cleaned homes and coordinated all clients❌ Staff were paid cash + misclassified as 1099s❌ Addbacks included vehicle gas, personal vacation, and rent❌ No customer tracking or CRM—jobs booked via text ✅ Adjusted FCF: ~$45K✅ Final valuation: ~$210K after labor and admin … Continue reading ⚠️ Red Flag Case Study: Dust in the Details

 🧹 House cleaning businesses can look steady—but valuations fall apart when: Owner does the cleaning or schedules all the work Customer churn isn’t tracked or normalized Labor is underpaid or misclassified (1099 vs. W-2) Addbacks include family wages, personal fuel, or vacations 📌 A full calendar doesn’t always mean clean cash flow.

📘 Just released: Our Roofing Contractor Valuation Checklist for SBA lenders Covers:✅ Owner licensing and labor normalization✅ One-time storm jobs vs. recurring revenue✅ CapEx for trucks, ladders, lifts, and safety systems✅ Customer mix, margin review, and backlog analysis✅ SBA-aligned project revenue normalization 📩 Click here to grab your copy.

A roofing company was priced at $1.2M based on $315K in cash flow. But: ❌ 40% of revenue came from one hurricane year❌ Owner was only licensed roofer + ran bids and inspections❌ Three trucks were leased personally—not in books❌ No CapEx or payroll adjustment for labor shortages ✅ Adjusted cash flow: ~$75K✅ Revised value: … Continue reading ⚠️ Red Flag Case Study: Storm Surge Surprise

 🏠 Roofing companies often show strong income—but valuations need to correct for: Owner as lead estimator or licensed roofer No adjustment for seasonality (weather + storm response) Deferred CapEx on trucks, trailers, safety gear Revenue spikes from one-time insurance jobs 📌 High sales during storm season don’t always mean transferable value.

📘 Just released: Our Specialty Retail Valuation Checklist for SBA lenders Covers:✅ Owner dependency in merchandising or vendor sourcing✅ Inventory treatment + seasonality smoothing✅ CapEx for store fit-out, displays, signage, and software✅ Addback risks in lifestyle-driven businesses✅ SBA guidance for niche and boutique retail 📩 Click here to grab your copy.

A party supply store was priced at $720K based on $125K in SDE. But: ❌ 40% of sales were tied to one season + one product category❌ Inventory wasn’t separated from goodwill❌ Owner created all displays and managed vendor relationships❌ Addbacks included personal warehouse rent + family employee perks ✅ Adjusted FCF: ~$65K✅ Realistic value: … Continue reading ⚠️ Red Flag Case Study: Party’s Over

 🛍️ Specialty retail can be profitable—but valuations unravel when: Revenue is seasonal, fad-driven, or overly dependent on the owner’s brand Inventory is not itemized Addbacks include family payroll, personal subscriptions, or non-business travel CapEx for fixtures, displays, or tech is ignored 📌 Being trendy isn’t the same as being transferable.

📘 Just released: Our Physicians & Medical Practice Valuation Checklist for SBA lenders Includes:✅ Owner replacement logic + credentialing considerations✅ Payer mix + revenue quality review✅ Billing + administrative support assessment✅ Goodwill transferability safeguards✅ SBA SOP alignment for licensed service providers 📩 Click here to grab your copy.

A solo practice reported $285K in "cash flow" and sought a $975K purchase price. But: ❌ 100% of services delivered by the physician-owner❌ No owner compensation or payroll—only 1099 nurse, admin and billing help❌ Medicaid accounted for 45% of payer mix with reimbursement delays❌ Addbacks included personal vehicle, meals, and family insurance ✅ Adjusted FCF: … Continue reading ⚠️ Red Flag Case Study: Paging Dr. Overvalued