Original Summary

A couple of years ago I posted here after we helped a client through an acquisition and shared some general thoughts from the experience. Since then, we have worked through a number of additional deals. There are a few things we pay more attention to now after seeing them come up across different transactions. There have also been some recent changes around SBA-financed acquisitions, but do not want to make this an SBA rules post. These are more just a few observations from deals we have been working through recently. Just Believe in the Future and Pay for It Now One thing I see fairly often is a business being valued partly on what it is expected to do over the next 12-18 months, rather than what it has actually done. Maybe there is a strong backlog, a few large projects about to start, delayed work moving into next year, new salespeople coming online, etc. Sometimes the story is very believable. But we have looked at businesses where the historical earnings support one valuation and the asking price really only works if next year's forecast gets hit. My advice: I would separate what the business has actually proven from what you think it can do. There is nothing wrong with believing the upside, but I would be careful paying the seller upfront for all of it. More Critical Eye To Earnings [Editor's Note: Which Should Have Always Been the Case] I talked about addbacks and SDE in my original post, but I think the financial diligence around acquisitions has become more important. The interesting questions usually aren't whether depreciation or interest gets added back. It is the less obvious stuff. Does the owner's compensation really go away? Is the rent changing after closing? Did margins move materially? Is something being called "one-time" that actually shows up every year? Does the current year look like the trailing numbers? On larger SBA transactions, there can also be more formal financial diligence involved now, including QoE work in certain situations. My advice: Treat the seller's adjusted EBITDA or SDE as a starting point. I would want to understand fairly early what the earnings really look like once the adjustments and addbacks are actually tested, and how a lender is likely to view them. So....What Does the Owner Actually Do? This has come up a lot in businesses we have explored with clients. An owner may say they only work 10 or 20 hours a week, which sounds great initially. Then you find out they hold the license, handle the largest customer, price the difficult jobs, maintain the bonding relationship or are still the person employees call when something goes wrong (but again, they only work 10 to 20 hours a week, right?) That is very different from an owner who is genuinely replaceable. The newer SBA rules provide some additional flexibility around seller transition in certain situations, which helps. But especially in plumbing, HVAC, electrical and similar businesses, that does not solve the licensing

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  • 信息来源：Reddit · Entrepreneur
  • 发布时间：2026/10/13 22:20:43