Frequently Asked Questions


  • A CPA’s code of ethics precludes them from appraising or valuing a business unless they have substantial experience buying and selling businesses, or unless they hold an appropriate certification or designation to appraise them. Anyone tasked to value a business should have real-world experience in M&A, not just theoretical knowledge.

  • The seller’s financial statements are available upon request after you have reviewed the confidential information memorandum (CIM).

  • Tax returns, bank statements, and other sensitive documents are only released after a letter of intent is accepted, during the due diligence period.

  • SDE includes the owner’s salary, while EBITDA deducts a reasonable salary for a full-time manager. SDE is most commonly used when an individual is buying a business, and EBITDA is most commonly used when a company is the purchaser.

Due Diligence

  • Due diligence is the systematic process of gathering and analyzing information necessary to help buyers and sellers determine whether they should proceed with a business transaction. Due diligence includes a review of quantitative information, such as sales and financial data, and qualitative information, such as an assessment of the existing management, internal systems, and existing licenses.

  • No. Please do not approach any employees of the business. Employees and management will likely not be aware of the sale and would fear the loss of their jobs or major changes to their roles.

Transaction Structure

  • The price generally includes all assets required to generate the cash flow or profit of the business, with the exception of cash, the owner’s personal assets (laptop, phone, vehicle, etc.), and real estate.

  • Inventory is customarily paid in addition to the purchase price for smaller transactions, though it is sometimes included if it’s a nominal amount. Working capital, which includes inventory as one of its components, is customarily included in larger transactions.


  • On average, it takes two to four months to close after the letter of intent is accepted. We have closed some transactions in as little as one week, while others have taken more than six months. It generally takes one to two months to complete due diligence and one to two months to close after that. The process can take longer if third-party financing is involved or if complications arise.

  • The seller can either pay these off at closing, or the buyer can assume the leases. Either way, this should be clearly outlined in the purchase agreement.

  • Yes, the assets of the business should be delivered free and clear at closing. Any debt to be assumed should be identified, including the amount of the debt and the terms of repayment.