Most small businesses are not priced lower because of one big issue. They are priced lower because of a handful of common risk factors.
If the business relies heavily on the owner for sales, operations, or relationships, buyers see risk. This often reduces the multiple applied to cash flow.
Even if profits are still decent, a downward trend makes buyers cautious. Stability matters.
If customers pay 30, 45, or 60 days after work is completed, the buyer needs more working capital. That reduces value.
If a few customers make up a large portion of revenue, losing one could materially impact the business. Buyers adjust for this risk.
If everything is in the owner’s head and not documented, the business is harder to transition and harder to scale.
Most of these issues are fixable. Small operational changes can meaningfully improve how a buyer views your business.
If you want a quick snapshot of where your business stands today:
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