Beginning with the End in Mind

Beginning with the End in Mind

By Reno J Heine

Recently, a Carolinas lending partner met with us at our weekly “What’s Up” training sessions. We asked him, “What are some of the biggest mistakes and deal-breakers you see?”

You can imagine how quickly he began to speak and how long his list was. His frustration was largely due to the lack of accounting and financial skills in a majority of business brokers across the Carolinas. We were surprised to hear what he’s been seeing and thought you may be able to ensure a higher success rate on your exit if we passed along a few of his suggestions:

Keep the end in mind by having your intermediary (business broker):

  1. Dissect the financials…you know the third party valuation analyst will do the same. Get this done up front before the deal is squashed.
  2. Segregate the revenue streams; different risks and weights apply to various revenue types. You want to avoid relying on a purchase price and experiencing a significant disappointment with either a killed deal or a significant cut in the purchase price due to inaccurate pricing.
  3. Be reasonable and practical about items in your seller discretionary earnings. If the new business owner will need the same or similar expense, it’s not a discretionary item. This was the most frequent error he sees.
  4. Provide documentation for the seller discretionary earnings ahead of time so you have a strong platform to defend your listing price.

For more information about selecting a business intermediary, contact Reno at