u/UltraBBA

>Contribute something worth discussing. No generic AI-generated posts or comments, recycled business advice, motivational waffle, or posts whose main purpose is to make the author look successful or knowledgeable.

>Adding “Thoughts?” or “What’s your experience?” to a generic lecture does not turn it into a genuine discussion. Promotion includes building a personal brand or manufacturing authority, even without links, business names or an explicit sales pitch.

>
>Mods have wide discretion to delete these posts / comments, particularly those from users with low karma or who are new to this sub.

Me: investor/owner, not an operator. I run marketing + systems, a skilled operator runs the floor. Done it before in another industry.

The business (pet grooming + retail, affluent Canadian city neighbourhood):

• Revenue ~$285K/year — 60% grooming, 20% retail, 20% online
• Rent ~$43K/year
• Grooming done by 5 subcontractors (~$64K/year), no contracts
• Asking: $280K
• 1 Full Time Store Asscioate whom the community loves.

The catch:

• Reported net income ~$12K, but after add-backs (depreciation, financing, owner perks, that display rent) real SDE is ~$45K/year
• Owner bought it ~16 months ago and is already selling — says family reasons, I suspect a flip
• He's barely there with no client following (good), but clients follow the groomers — and they're subcontractors who could walk at close (my biggest risk)

At ~$45K SDE I peg fair value ~$160–190K. His $280K looks like cost-recovery, not what the cash flow justifies.

My plan: bring in a full-time groomer on salary + commission to lock in capacity, which I already have someone who is bringing there whole clientale. Keep 1-2 groomers sub contracted and feed them more bookings via my marketing. Retail: subscription auto-ship on premium food, loyalty program to cross-sell grooming clients, lean into high-margin boutique items.

Questions:

1. Is $280K crazy for ~$45K SDE, or am I undervaluing location/upside?
2. Anyone moved groomers from subcontract to salaried — better loyalty or just worse margins?
3. Red flags in a 16-month flip?

Brutal honesty welcome.

If anyone has some good understanding on this I'd love to get in touch and get some understanding on it, even paid....

Im in the process of trying to purchase a small, 3-screen movie theater in a small town. This includes the theatre, business, and all FFE inside. The building itself is in a beautiful historic dowtown & surrounded by 3 big colleges & is easily worth the purchase price alone. I’m looking at financing the acquisition plus working capital through a business loan.

My plan would be to keep my current full-time job for the first 1–2 years while I have managers run the theater, then eventually transition over if the numbers support it (I make $90K).

I have a TON of ideas to bring to the table to boost revenue/profit like: alcohol sales, memberships, later/earlier showtimes, increased concession options and thie biggest being local advertisements to play before the movies start while everyone is finding their seat.

If i get 50 businesses at $250 a month to play their add, thats $150K in just pure profit!

The biggest challenge is that I have very little cash available for a down payment, so I’m trying to figure out whether there are realistic ways to structure the deal through SBA/business financing, seller financing, or other sources without putting a huge amount of my own money into it.

I’ve never purchased a business before, so I’m currently talking to CPAs, lenders, and potentially an acquisition attorney.

For those who have bought a small business before: what am I missing, and what would you do first?

We have strict rules on what posts we allow.

In the past, we had a lot of newbies posting crap without reading the rules. We tried telling them nicely. We tried automated warnings at point of writing the post.

Didn't quite work.

So we ban them for a week for first offence.

But now we're getting a lot of people who complain about the ban, mostly people fairly new to Reddit, who confuse us mods with Reddit management/Reddit's AI.

They have a go at us for recommending that they post in our sub and then banning them from posting. Er, it's not us i.e we are not the ones who recommended you post your crap in our sub!

How can we stop Reddit recommending to all and sundry that they cross post to our sub? We don't want Reddit to completely block us appearing in search results or AI results, we just want it to stop recommending that people share their posts in our sub.

And if we can't achieve that, do you guys have any other suggestions? Banning these users is not a great look for us, nor for Reddit.

This is an insidious problem and seems to be getting worse.

I moderate subs on Mergers & Acquisitions / business buying and selling. I often get established Reddit accounts making their first post in one of my subs and dropping the name of a service / company. It looks innocent, but it ain't.

The user has no interest in our subject, has never posted on this topic before, makes a one-off comment and never returns.

Sometimes they drop the name right at the start and at other times automod settings catch they they've edited the post / comment to add mention of that name.

There are about half a dozen such brands / names that regularly keep cropping up.

If I go and check the user's account, they've commented in vastly different subs, from how to beat mold to sci-fi to music where they've done this, in each case posting a name relevant to that sub's topic.

Doing a bit of digging, I find that user A has posted about X brand in my sub, about Y brand in, say, a music sub and Z brand in a sci-fi sub.

Then user B comes along, again someone who's never posted in a business sub but who has 100s or 1000s of karma. They post about X brand in my sub, about Y brand in some music sub and Z brand in some sci-fi sub.

These are not links, they are just dropping of names but there seems to be SEO merit even in name mentions, not just links, so that may be the real intent in addition to of course a direct promotion to people with interest in that topic.

Is there some paid program paying these accounts to make these innocuous looking name drops and, more importantly, how are other mods combatting this?

My own solution: I've added the names of the offending brands to automod and any post / comment mentioning any of those brands automatically goes into the mod queue. I check it out and if it's a first time poster, I ban them because I know they ain't coming back and their only reason for commenting in my sub was to drop a name.

But that doesn't remove the root of the problem from a Reddit perspective. These users are still on Reddit and still name dropping in other subs.

Thoughts? Comments?

Please note that this sub is for the discussion of buying/selling established businesses.

Established businesses, for the purpose of this sub, are those that have been generating revenue for at least six months and have a record of profit (or loss).

Do not start a thread about selling a startup if that startup doesn't meet our definition of a business.

That's not to say these are not sellable. A few of them are, but we don't discuss them here, sorry.

For those of you wanting more serious discussions on corporate finance related matters, financial analysis, corporate structuring etc., I've just taken over r/corporatefinance . Feel free to drop in and create a post / make a comment or even just hit the "Join" button.

For those of you wanting more serious discussions on corporate finance related matters, financial analysis, corporate structuring etc., I've just taken over r/corporatefinance . Feel free to drop in and create a post / make a comment or even just hit the "Join" button.

https://www.reddit.com/r/corporatefinance/

Some thoughts on selling smaller businesses vs selling mid-market companies.

Selling a mid-market business: competitive process, strategic acquirers, institutional capital, management presentations.
Selling a microbusiness: "Can you prove it makes money, and will the owner stay for six months because nobody knows how anything works?"

Mid-market buyers ask about synergies.
Microbusiness buyers ask whether the van is included.

In the mid-market, buyers analyse adjusted EBITDA.
In microbusinesses, buyers analyse whether the owner’s mobile number is basically the whole business.

Mid-market sale: data room, IM, Q&A tracker, buyer shortlist.
Microbusiness sale: three years’ accounts, a WhatsApp thread, and someone asking if the price includes stock.

Mid-market buyers worry about customer concentration.
Microbusiness buyers worry that the only customer, supplier, salesperson and operations manager is a guy called Dave.

Selling a mid-market business is about proving the business can scale.
Selling a microbusiness is about proving it can survive the owner going on holiday.

Mid-market business: "We have a second-tier management team."
Microbusiness: "My wife does the invoices and my nephew knows the password."

Mid-market acquirers want strategic fit.
Microbusiness buyers want to know if the landlord will let them keep the sign.

The mid-market has deal teams.
Microbusinesses have a buyer, a broker, a lender, and someone’s uncle who once bought a café.

Mid-market buyers ask, "What is the growth thesis?"
Microbusiness buyers ask, "Will the staff stay if John leaves?’”

Mid-market businesses have systems.
Microbusinesses have Sarah-Jane.

Mid-market businesses are sold on process.
Microbusinesses are sold on trust, coffee, and whether the buyer believes the owner’s add-backs.

Mid-market deal issue: earn-out mechanics.
Microbusiness deal issue: the owner’s son still uses the company van.

Mid-market valuation: multiple of EBITDA.
Microbusiness valuation: multiple of profit, less chaos, plus whatever the owner thinks 20 years of graft is worth.

Selling a mid-market business is like running an auction.
Selling a microbusiness is like trying to get a mortgage, a therapy session and a pub argument into one transaction.

I don't know what I'm doing wrong. I've got the Reddit sub in the subject, formatted as it should be. I've got the full link in the body of the post. I've selected the SFW flair but the post button is still greyed out and I can't post this.

Please, does anyone have any suggestions for what might be wrong?

Update: Thanks to everyone for their help. This is now sorted.

I'm curious to hear from business brokers and experienced buyers.

What are the biggest mistakes you see first-time buyers make before they even reach out about a business for sale?

For example:

* Focusing on the wrong metrics?

* Not understanding valuation?

* Asking the wrong questions?

* Chasing the wrong types of businesses?

* Not doing enough research beforehand?

If you had to give a first-time buyer three pieces of advice or action steps before they contact a broker, what would they be?

Just that. Was interested if anyone sold with a high percentage of seller financing (and if you did, how did that work out for you?)

https://preview.redd.it/axocqkf42m7h1.jpg?width=800&format=pjpg&auto=webp&s=ff62e1b2566aedbb30778ce04d3e031bfbfdfb65

SpaceX today starts trading on Wall Street after their IPO.

Please, please, please, would owners of other businesses not take the SpaceX 100x valuation as a multiple that applies to your business.

On behalf of business broker and M&A advisories all over the globe, thank you so much. :)

My view: Right at the start, especially if you've got a good and trusted accountant.

Sellers rarely speak with their accountant first. Instead, they speak with a friend down at the pub or with a business broker.

I think that's the wrong starting point.

Here’s why.

𝟭. 𝗬𝗼𝘂𝗿 𝗮𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗻𝘁 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗸𝗻𝗼𝘄𝘀 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀.

A broker may know the market. Your accountant knows your numbers, your history, and often the commercial reality behind the accounts.

𝟮. 𝗧𝗵𝗲𝘆 𝗰𝗮𝗻 𝗮𝗱𝘃𝗶𝘀𝗲 𝗼𝗻 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝗷𝘂𝘀𝘁 𝘁𝗵𝗲 𝘀𝗮𝗹𝗲.

A good accountant can help you think through tax, transaction structure, valuation, timing.

𝟯. 𝗬𝗼𝘂 𝘄𝗶𝗹𝗹 𝗻𝗲𝗲𝗱 𝘁𝗵𝗲𝗺 𝗮𝗻𝘆𝘄𝗮𝘆.

Whichever broker or adviser you appoint, your accountant is likely to play an important role during the process. Bringing them in early is far better than asking for urgent support halfway through a deal.

𝟰. 𝗧𝗵𝗲𝗶𝗿 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀 𝗮𝗿𝗲 𝗯𝗲𝘁𝘁𝗲𝗿 𝗮𝗹𝗶𝗴𝗻𝗲𝗱 𝘄𝗶𝘁𝗵 𝘆𝗼𝘂𝗿𝘀.

Some brokers are excellent. But brokers are still selling a service. That can sometimes lead to optimistic valuations and optimistic promises about saleability. Your accountant is generally in a better position to give you a more grounded view.

𝟱. 𝗧𝗵𝗲𝘆 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽 𝘆𝗼𝘂 𝗽𝗿𝗲𝗽𝗮𝗿𝗲 𝗽𝗿𝗼𝗽𝗲𝗿𝗹𝘆.

Before a business goes to market, there is often value in tidying up the accounts, improving management information, clarifying adjustments, and addressing issues that may come up in due diligence.

That preparation can influence both price and probability of sale.

To be clear, this is not an argument against brokers. It is an argument for getting the foundations right before speaking to one.

In many cases, the best sale processes start with a good accountant involved early.

What do you think? When should the accountant be brought in?

The below advice is for the mid-market and based on my many years of operation in that market.

In the UK at least, businesses in the mid-market are not sold by brokers but by advisory firms so I'll use that terminology going forward.

There are four things I advise clients to not say to advisory firms:

Prior to that, remember that the best players in the market, the ones who can get you the highest price, are in huge demand and they are very, very selective in which clients they take on.

The rubbish advisories in the market will take on anything and everything. They'll flatter you, they'll give out free valuations based on little to no information about your business, they'll talk up the potential and their "success rate".

The best players in the market will ask a hundred questions before agreeing to take you on. Here are some tips for dealing with them:

1. Don't tell them what you price you need to see! Accept that they're the experts and that whatever deal they get you is what your business is worth in the current market.

2. Don't underplay the extent of the business dependence on you (unless you're 100% sure you'll survive that being tested in depth, 100%, every which way. Do NOT lie on this. You WILL get caught out!)

3. Do not offer to pay less up front in exchange for a higher % on the "success fee". You're not a genius for coming up with that fee structure suggestion. A lot of people try that stunt and it really annoys them.

4. Do not lie on anything they ask you. You'll be surprised how easily they can spot your lie with a few online searches / credit reports / AI analysis.

If you have questions about the logic behind any of the above, feel free to drop your question below and I'll try to answer.

In Mod Tools > Insights > Reports and Removals, there's a chart showing number of admin actions taken. They are categorised as

• Not reviewed by mods
• Opposite of mod action and
• Aligned with mod action

Where there's a positive number for decisions taken that were opposite of mod action, I'm assuming an admin decided to reverse a decision taken by a moderator.

However, there doesn't seem to be any way to identify which moderator decision was reversed (or why).

How can I find out what decision(s) was reversed?

When hiring business brokers and M&A advisory firms, there’s something most business owners don’t realise which causes them to make fatal mistakes.

First, most M&A firms are broadly honest. But they are also extremely creative in how they present their “track record” 😉

I'll share a recent example where I was assisting a client in the renewable energy sector identify the right UK adviser to sell their £15m business.

As part of the process, I spoke with around 40–50 firms active in energy M&A and asked a very specific question:

“Give me examples of sell-side mandates where YOU were the lead adviser.”

I was crystal clear:

- not buy-side work;

- not fundraising;

- not “we advised in some capacity”;

...only deals where they actually led the sale process.

One firm (whose name begins with “G”) then sent over examples including:

• sale of GEV Wind Power to Certek;
• sale of Boston Energy to LDC;
• sale of SMC to OEG Offshore.

Sounds impressive. Except after extensive digging online, checking deal announcements and press releases etc, I found that the lead advisers appeared to be:

• FRP Corporate Finance on the GEV deal;
• KPMG on the Boston Energy deal;
• and Argyll Partners on the SMC transaction.

In other words, the firm claiming these examples did not appear to have led any of those transactions!

They may have provided some ancillary advice, sure, but they didn't handle the sale.

And this kind of thing happens often!

The same applies to other claims on “success rates”, “average multiples”, “sector expertise” ...and even claims that a business was “sold”.

Quite often, once you start checking Companies House filings and transaction details, the reality looks rather different. The business never changed hands!

This is not to say there aren’t excellent advisers in the market. There absolutely are.

But business owners should carry out far more due diligence before paying five-figure retainers.

What amazes me is that many founders will spend:

- weeks researching a company car;

- months researching a software system;

…but appoint the firm handling the sale of their life’s work after one pleasant Zoom call and a glossy pitch deck.

Many owners barely investigate the adviser at all and they take a lot of what they're told ....purely on trust. 🤦‍♂️

Why are multiples for SaaS firms going down the pan?

I've been observing this for the last year or so - brokers have been reporting to me increased difficult with selling many tech businesses.

Is it all to do with 'AI displacement risk' or is there something else going on?

There are still individual cases of deals that have gone very well and that have achieved high multiples.

What's your experience been as a business broker or as a seller / buyer?