Assess your earnings position

Why Earnings Are Critical To Your Sale Money Chart Image by Mergers and Acquisitions

Decision Associates M&A understands why earnings are critical to the sale of your business and can help you assess your earnings position.

With this assessment in hand, our experienced mergers and acquisitions experts can show you how to prepare your business for sale. So here are the key reasons earnings matter to buyers:

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
  • If selling to children or employees, makes it bankable and provides a very stable starting point
  • Increase potential sale price to third party buyers

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
  • Results in minimal sale price

To learn more about why earnings are critical to the sale of your business, contact Decision Associates M&A today.