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What is My Business Worth - How Valuations are Made
What is a business really worth, and why do buyers and sellers so often see that number differently? In this episode of Transaction Talk, Jennifer Fox and Eric Sigman sit down with Louis Pereira of Merrimack Business Appraisers to unpack how business valuations are actually determined and why preparation plays such a major role in maximizing value. Drawing on decades of experience in business brokerage, mergers and acquisitions, and valuation work, Louis explains the financial metrics buyers focus on, including EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), seller's discretionary earnings (SDE), cash flow, and valuation multiples. The conversation also explores why similar businesses can sell for very different prices, the common mistakes owners make when estimating value, and why some buyers are willing to pay more than others. Along the way, Louis shares practical advice on clean financials, long-term planning, and positioning a business for a stronger sale. Tune in for a practical discussion on what really drives value in today's market!
Key Points From This Episode:
- Introducing today's guest, Louis Pereira of Merrimack Business Appraisers.
- Discover why business valuations matter to both buyers and sellers.
- Learn why owners should prepare years in advance before selling a business.
- Explore why many owners overestimate what their business is worth.
- What buyers focus on: breaking down EBITDA, SDE, and cash flow metrics.
- Find out how valuation multiples and earnings are determined.
- How appraisers use sales data from similar businesses to determine value.
- Why similar businesses can sell for very different prices.
- Common value killers that reduce the sale price and buyer confidence.
- Understanding value as an opinion shaped by multiple factors.
- Discover how preparation and the right advisors can increase value.
Tip of the Day: A valuation sets the baseline for what your business is worth, but the right advisor can uncover buyers who see greater strategic value in it. Understanding your market and positioning your business for the right buyer can make all the difference in the final outcome. Links Mentioned in Today's Episode: Louis Pereira on LinkedIn
Louis Pereira email: [email protected]
Louis Pereira phone number: 1-978-975-7600
Merrimack Business Appraisers Jennifer Fox on LinkedIn
Eric Sigman on LinkedIn
Transaction Talk
Disclaimer:
The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.
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By Jennifer Fox and Eric SigmanWhat is a business really worth, and why do buyers and sellers so often see that number differently? In this episode of Transaction Talk, Jennifer Fox and Eric Sigman sit down with Louis Pereira of Merrimack Business Appraisers to unpack how business valuations are actually determined and why preparation plays such a major role in maximizing value. Drawing on decades of experience in business brokerage, mergers and acquisitions, and valuation work, Louis explains the financial metrics buyers focus on, including EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), seller's discretionary earnings (SDE), cash flow, and valuation multiples. The conversation also explores why similar businesses can sell for very different prices, the common mistakes owners make when estimating value, and why some buyers are willing to pay more than others. Along the way, Louis shares practical advice on clean financials, long-term planning, and positioning a business for a stronger sale. Tune in for a practical discussion on what really drives value in today's market!
Key Points From This Episode:
- Introducing today's guest, Louis Pereira of Merrimack Business Appraisers.
- Discover why business valuations matter to both buyers and sellers.
- Learn why owners should prepare years in advance before selling a business.
- Explore why many owners overestimate what their business is worth.
- What buyers focus on: breaking down EBITDA, SDE, and cash flow metrics.
- Find out how valuation multiples and earnings are determined.
- How appraisers use sales data from similar businesses to determine value.
- Why similar businesses can sell for very different prices.
- Common value killers that reduce the sale price and buyer confidence.
- Understanding value as an opinion shaped by multiple factors.
- Discover how preparation and the right advisors can increase value.
Tip of the Day: A valuation sets the baseline for what your business is worth, but the right advisor can uncover buyers who see greater strategic value in it. Understanding your market and positioning your business for the right buyer can make all the difference in the final outcome. Links Mentioned in Today's Episode: Louis Pereira on LinkedIn
Louis Pereira email: [email protected]
Louis Pereira phone number: 1-978-975-7600
Merrimack Business Appraisers Jennifer Fox on LinkedIn
Eric Sigman on LinkedIn
Transaction Talk
Disclaimer:
The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.