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.