At X2.5 SDE
SDE would give us a normalized view of what the business will produce for us next year excluding the owner; hence a fairer multiplier. For business that runs under the benchmark of $5M in revenue, EBITDA does not give the best picture of a business’s value, particularly a small business where the owner runs the day-to-day operations.
Simply because we are qualified buyers! The sad reality is that most small businesses don’t get sold. The statistics show 80% of small businesses that are listed online will not be sold. EPI estimates that some 4.5 million firms representing more than $10 trillion in business value will transition over the next decade or so, but Snider believes only about 20 percent to 30 percent of businesses that go to market end up selling. This estimate is consistent with BizBuySell’s most recent national report, which indicated about one of every five listings on the online marketplace for small business sales and purchases had closed a sales transaction in 2016. Source: Forbes On the other hand, 90% of buyers do not buy a business. This means that if you ever landed 10 buyers to buy you coffeehouse, you most probably will end up with only one of them. This is quite in efficient for everyone involved. What we offer you is a time efficient framework provide you with the best existing strategy and support throughout the acquisition process and at the same time we get a better exposure to the coffeehouses that share our criteria yet scattered nationwide.