Rob Parker

So taking time in the process to get to know these groups, see what their vision for growth looks like, and make sure that fits with yours is very important if you're going to have a good partnership. I agree.

So taking time in the process to get to know these groups, see what their vision for growth looks like, and make sure that fits with yours is very important if you're going to have a good partnership. I agree.

Yeah. So a quality of earnings is an accounting analysis or review of a company's financial statements. So it's not an audit. It's not that detailed. It's not necessarily the same as an audit, but it's a review of the numbers and an assembly of the numbers in a format that a buyer would actually be underwriting.

Yeah. So a quality of earnings is an accounting analysis or review of a company's financial statements. So it's not an audit. It's not that detailed. It's not necessarily the same as an audit, but it's a review of the numbers and an assembly of the numbers in a format that a buyer would actually be underwriting.

So number one, it's a scrub to make sure the numbers are accurate and they're being reported the right way. Number two, it's making sure they're compiled in a way that the buyer can actually underwrite. So for example, a lot of private business owners might have some personal expenses that they put through their business.

So number one, it's a scrub to make sure the numbers are accurate and they're being reported the right way. Number two, it's making sure they're compiled in a way that the buyer can actually underwrite. So for example, a lot of private business owners might have some personal expenses that they put through their business.

Well, those personal expenses will go away when they're no longer the majority owner. So something like that can be added back. There may have been a one-time item that occurred a year before, two years before, that's not going to recur again. That's an expense that can be added back.

Well, those personal expenses will go away when they're no longer the majority owner. So something like that can be added back. There may have been a one-time item that occurred a year before, two years before, that's not going to recur again. That's an expense that can be added back.

So they look for those sorts of adjustments to get the most accurate representation of the actual earnings that they're looking to buy.

So they look for those sorts of adjustments to get the most accurate representation of the actual earnings that they're looking to buy.

Yeah. It's important to have audited financial statements when you have leveraging in the business. So a bank is going to want the statements to be audited for a couple of reasons. One, because it's an assessment or a judgment that the numbers have been accurately prepared and compiled and the CPA firm, the auditor, is rendering an opinion.

Yeah. It's important to have audited financial statements when you have leveraging in the business. So a bank is going to want the statements to be audited for a couple of reasons. One, because it's an assessment or a judgment that the numbers have been accurately prepared and compiled and the CPA firm, the auditor, is rendering an opinion.

So they're signing their own name that these numbers are represented accurately. So that's important for a bank and important in a leveraged environment, which is what you'll have most likely when when you sell your business. And, you know, one thing I just, a point I want to make about this, we're spending a lot of time talking about financial metrics and financial statements.

So they're signing their own name that these numbers are represented accurately. So that's important for a bank and important in a leveraged environment, which is what you'll have most likely when when you sell your business. And, you know, one thing I just, a point I want to make about this, we're spending a lot of time talking about financial metrics and financial statements.

And that's important because that is the output and it's the metric that a buyer needs

And that's important because that is the output and it's the metric that a buyer needs

it's like the scoreboard and it's what a buyer needs to look at to assess what they're willing to pay for a business but just a reminder to everybody all financials are is the output from everything else that goes into the business operating the company efficiently driving leads converting those leads what's your average ticket once you've made that conversion all those things that make a business great

it's like the scoreboard and it's what a buyer needs to look at to assess what they're willing to pay for a business but just a reminder to everybody all financials are is the output from everything else that goes into the business operating the company efficiently driving leads converting those leads what's your average ticket once you've made that conversion all those things that make a business great

That's the part that really matters. The numbers are just the output of all those things. So the numbers are important, and it is the metric that a buyer will use, but you have to tell the story behind the numbers. That's really what matters is the story behind the numbers, not just the numbers themselves.

That's the part that really matters. The numbers are just the output of all those things. So the numbers are important, and it is the metric that a buyer will use, but you have to tell the story behind the numbers. That's really what matters is the story behind the numbers, not just the numbers themselves.