If you're considering selling a business, it is important for you to start by understanding the true range of value, and what impacts your every day business practices can have on that range.
The market value of a small business can vary greatly from the book or tax mitigated value because most small businesses are managed to minimize taxable income. While this benefits the current owner, it's impact on how cash flow is reported will look less appealing to a potential buyer. Below, we'll show you how to mitigate that by performing a financial recast to calculate the true earnings of the business.