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.

"In my Decision Associates Peer Group, I learned to truly 'think outside the box' and consider new avenues to grow my business. The experience was invaluable. while our group members came from different industries, we looked to each other for advice, encouragement and support to address the issues in our own companies. Decision Associates challenged us to address the issues that were tough but had the most impact on our business. I feel strongly enough about it that I have asked my boys to become part of this upcoming peer group; it will be one of the best things I can do for their growth."

~ Jim Willats, President
Machining Concepts

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