Selling your business is all about minimizing risk to buyers. Buyers are going to look at and evaluate a business differently than a seller/owner might. A business owner may think that they have a great business simply because they have strong sales and are profitable. Profits and earnings are important, but buyers are looking at a much bigger, broader picture. Let’s discuss three red flags that indicate risk to a buyer.
For business owners thinking about a future sale, understanding the basics of business valuation is a critical first step. One of the most important, and commonly referenced figures in small business transactions is Seller’s Discretionary Earnings (SDE).
At the Spring 2025 M&A Source Conference, Kevin F. Murray was recognized with the Executive Club Award. This national honor is awarded to advisors who close over $5 million in transaction value across the lower middle market in a single calendar year.
The Business Seller Center is proud to announce that its founder and principal broker, Kevin F. Murray, has been awarded the prestigious Chairman’s Circle Award at the 2025 Annual International Business Brokers Association (IBBA) Conference.
When it’s time to sell your business, few decisions are more important than choosing the right business broker. This isn’t just a transaction – it’s the culmination of years of effort, risk-taking, and dedication. The right broker can significantly increase your final sale price and ensure a smooth, confidential, and professionally managed process. The wrong broker, however, can cost you time, money, and peace of mind.
Key considerations when selecting a business broker:
Experience Matters – But Not Just Any Experience
Most businesses are valued on a ‘multiple of earnings’ approach.
And, the higher your overall revenues and earnings, the higher multiple you are entitled to when it is time for you to sell.
For this reason, it may make a lot of sense to consider buying another business in your industry. Here’s why:
Let’s say there is a $2,000,000 annual revenue business in your industry, in your state and it is generating $400,000 in earnings for the Owner.
That business might be worth 2.5 - 3 times earnings.
Now, assuming you are the same size, you are worth a generally similar amount.
In this episode, #3 of the Expert Interview series from the Business Seller Center, we talk with Attorney Joe Fournier about the critical legal agreements that are needed to successfully sell your business.
In this 2nd interview with Jeff Swiggett, award-winning Business Broker, you will learn how Buyers may pay you more or less for your business, based on 6 Risk Factors that they evaluate. In this episode we’ll discuss:
1 - The conditions of the markets that the Business is serving, and
2 - The Client Concentration issues that may impact your value,
and BONUS TOPIC:
3 - Pandemic effects that have adjusted values.
We interview Jeff Swiggett, Business Sale and M&A Advisor as part of our Expert Interview series.
Jeff discusses how Buyers look at your business across 6 different value and risk factors.
This first interview covers Owner Dependence and Financial Controls as key issues that Buyers want to explore as they are preparing to make you an offer to buy your business.
This series of interviews provides great guidance on how to prepare for a strategic exit or sale of your company.
As a business owner, you have put a lot of blood, sweat and tears into your business for a long time. When it becomes time to consider how to make a transition, whether a sale or hand-off to the next generation, having the right business broker to support you makes all the difference in the world.
