How much should I pay? Analyze the MAX VALUE of a small business acquisition in only 30 SECONDS

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Hint: don't pay more than 3X earnings (aka "cashflow") for a biz doing 6-figs in annual earnings.

#mergersandacquisitions #jasonpaulrogers #finance
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Punchline here is simple: don't pay more than 3X earnings (aka "cashflow") for a biz doing 6-figs in annual earnings. If you want to make a quick offer, send over your standard LOI and offer 3x earnings max. If they don't bite, move along. More offers is the key. How can you score a goal if you don't take a shot? MAKE MORE OFFERS; and don't be afraid if the seller says no.

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What if the bank prefers to lend on a purchase price based on LTV rather than a multiple of EBITDA?

-jq