Why Earnings Are Critical To The Sale Of Your Business

Why Earnings Are Critical To The Sale Of Your Business

Decision Associates M & A understands why earnings are critical to the sale of your business. We can help you assess your earnings position and establish a pathway to prepare your business for sale.

Upside of strong earnings

  • Makes your business bankable; you receive favorable interest rates and covenants
  • May avoid personal guarantees
  • Provides resources for reinvestment from self-financing or favorable bank financing
  • Better ability to provide income and benefits to retain and attract good employees
  • Able to satisfy large customers who evaluate vendors’ financial stability
  • Increases potential sale price to third
  • If selling to children or employees, makes it bankable and provides a very stable starting point

Downside of weak earnings

  • Reverse of all the above
  • 85% of potential buyers will not even look
  • 15% of buyers will be interested in assets or customers
  • Minimal price

For a deeper understanding of the importance of earning, contact Decision Associates M&A.

“EmergyCare retained the services of Decision Associates in the fall of 2009 to guide us through the Strategic Planning process. Don Moore and his group of experts took our senior management team and select Board members through what I felt would be an arduous process. What resulted was a stronger senior team and a cohesive relationship with our Board of Directors, not to mention a roadmap (Strategic Plan) for the next 3-5 years. I definitely recommend Decision Associates to the nonprofit sector as we completed another update in 2015, and we continue to use them as the need arises.”

~ Bill Hagerty, Executive Director

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