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.

“Being in a peer group is extremely valuable because it’s a place where you can speak confidentially to other business professionals who understand your business issues, and can help you develop a path forward to handling them. It has also fostered my professional growth and helped me to understand and implement a variety of management techniques and strategies through the analysis of several books and articles.”

~ Danielle Bates, CPA, Controller
Accudyn Products, Inc.

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