Recast Owner Earnings Before Seeking Offers

At Las Vegas Business Brokers Firm, a value review begins with earnings you can document. Identify the work and costs a buyer will inherit before choosing an adjusted profit figure.

Decide which earnings measure fits the business

Seller discretionary earnings describes the benefit available to one working owner after supported adjustments. Adjusted EBITDA accounts for the cost of paying management to do the work. They are not interchangeable labels for the same number.

If you leave several jobs behind, identify their replacement cost. A buyer who must hire a manager cannot treat your full compensation as money freely available to repay acquisition debt.

Revenue helps describe company size, but profit and risk drive the valuation discussion. A higher sales total does not automatically support a higher price.

Build an adjustment schedule someone can audit

Start with reported earnings and list each proposed adjustment separately. Include the account entry, amount and reason. Personal or unusual expenses need evidence rather than an estimate based on what you remember.

Do not add owner draws to profit just because they reached your personal bank account. Distributions may not be an expense on the profit and loss statement in the first place.

Money from an asset sale or a loan is not recurring operating income. Separate it from the earnings a new owner can reasonably expect the company to produce.

Check the costs that come back after closing

A low rent arrangement can change when a buyer takes over. Equipment replacement, payroll and working capital can also reduce the cash available after the acquisition.

Give your CPA current monthly results and reconcile them with tax reporting. Buyers will ask why margins changed, not just whether the latest total is higher.

An independent value discussion can test your assumptions before an asking price hardens into a promise. It remains a market assessment, not a guaranteed offer.