Preliminary calculator
A starting point based on the information you enter. It cannot review your records, confirm earnings adjustments, or decide which completed sales provide a useful comparison.
What Could Your Business Sell For?
Whether you’re ready to sell or just considering it, Aniss Cherkaoui, P.A. reviews your earnings, relevant completed business sales, and the factors buyers consider to help you understand a realistic selling-price range.
Start With the Right Kind of Guidance
An online estimate, a broker’s pricing opinion, and a formal appraisal serve different purposes. If you are considering a sale, the discussion should focus on what a buyer may pay for your business and the terms that could affect that price.
Broker’s pricing opinion
Aniss Cherkaoui, P.A. provides a Broker’s Pricing Opinion (BPO) and Most Probable Selling Price (MPSP) analysis. This is market-based pricing guidance for a potential business sale.
Formal appraisal
A tax, estate, dispute, or other third-party matter may require a formal appraisal or specialized valuation. Confirm the intended use and requirements with the requesting party and an appropriately qualified professional.
BPO/MPSP pricing guidance is not a formal or certified appraisal, a legal or tax opinion, or a financing decision.
How Your Potential Selling Price Is Reviewed
The review brings together financial records, market evidence, and an understanding of how your business works. No single factor tells the whole story.
Relevant completed sales
Sales of businesses in a similar industry, size range, and operating model provide context. Differences in earnings, assets, management, and deal terms still need to be considered.
Earnings and adjustments
Financial records are reviewed to understand reported earnings and proposed add-backs. Adjustments need an explanation and supporting records.
Customers and recurring revenue
Customer concentration, repeat business, contract terms, and margins help explain how dependable the earnings may be under new ownership.
Your role in the business
A buyer needs to know what you do, what employees or managers handle, and what training or replacement staffing may be needed when you leave.
Lease, assets, and transfer requirements
The location, equipment, inventory, licenses, and ability to transfer key agreements can affect both the price and the transaction terms.
Buyer demand and financing
The pool of suitable buyers and their ability to fund the purchase can affect an offer. When financing is involved, the lender makes its own approval decision.
SDE, EBITDA, and the Multiple
Owner-operated businesses: SDE
Seller’s discretionary earnings (SDE) is commonly used when reviewing owner-operated businesses.
SDE includes one owner’s salary and benefits added back to the business’s profit, along with other applicable adjustments.
Proposed adjustments must be supported by the records. An expense does not qualify as an add-back simply because the seller describes it as unusual or discretionary.
Companies with management: EBITDA
EBITDA means earnings before interest, taxes, depreciation, and amortization. It may be more relevant for a company with an established management team or less dependence on one working owner.
The appropriate earnings measure depends on the business and the buyers evaluating it. Using EBITDA does not automatically produce a higher multiple or make private equity the likely buyer.
There is no single multiple for every business.
Two businesses in the same industry can have similar earnings and still sell for different prices. Customer relationships, staffing, owner involvement, assets, financing, and deal terms can make a meaningful difference.
What to Have Available
Recent financial records help make the first discussion more useful. You do not need a complete sale package before getting in touch.
Start a confidential seller inquiry- Recent business tax returns and profit and loss statements.
- Balance sheets and current-year financial results.
- An explanation of your role, compensation, and proposed add-backs.
- Basic information about customers, employees, the lease, and major assets.
- Your reasons for considering a sale and your preferred timing.
The Final Price Depends on Negotiations and Terms
A pricing opinion helps establish expectations. The asking price is the position taken when marketing the business; the final price is negotiated between the buyer and seller.
Due diligence, financing, included assets and inventory, working capital, seller financing, and transition arrangements can all affect the outcome. A BPO/MPSP analysis does not guarantee an offer, a closing price, or financing approval.
For what happens after preparation and pricing, review the business selling process. Larger or more complex transactions may call for a lower middle market M&A approach.
Business Sale Pricing Questions
What does Most Probable Selling Price mean?
MPSP is an estimate of the price a properly marketed business is reasonably likely to achieve, based on available information and relevant market evidence. It is not automatically the asking price or final closing price.
Can a calculator tell me what my business will sell for?
A calculator can provide a preliminary starting point. It cannot examine your records, understand your operating structure, or assess every difference between your company and businesses that have sold.
Does the review include a formal appraisal?
No. Aniss Cherkaoui, P.A. provides BPO/MPSP guidance for a potential business sale. A formal appraisal or specialized valuation for another purpose should be handled by an appropriately qualified professional.
Does my involvement in the business affect the price?
It can. A buyer may need to replace the work you perform, maintain your customer relationships, or obtain required qualifications. An established team and documented procedures may make the transition easier.
Does recurring revenue always mean a higher price?
Recurring revenue can help when customers are likely to stay and the work produces dependable margins. Contract terms, retention, customer concentration, and the cost of delivering the service still matter.
What if I am still deciding whether to sell?
An initial discussion can help you understand pricing considerations and questions to address before going to market. If your main concern is readiness, you can also review the Business Sellability Score.
Let’s Discuss Your Business
Talk with Aniss Cherkaoui, P.A. about your company, your timing, and what a buyer may consider.
Affiliated with Transworld Business Advisors
305-608-6761 · aniss@tworld.com