Frequently Asked Questions (FAQ)

What your business is worth comes down to what it earns, how much of that earning depends on you, and what a buyer's lender will fund. Every business is different, which is why a real answer takes a look at your actual financials rather than an industry average. We build that number and defend it to the buyer and the bank. Learn about our valuations process.

Valuation starts with the earnings, and the first decision is which earnings measure applies to your business.

Most privately held businesses get valued on SDE, seller discretionary earnings. SDE captures the total financial benefit of owning the business, so it starts with net profit and adds back what you pay yourself, the personal expenses the business covers on your behalf, one time costs that will not repeat for the next owner, and non cash items like depreciation and amortization. It answers the question a buyer who plans to run the business actually cares about, which is how much money this business will put in my pocket.

Larger businesses get valued on EBITDA, earnings before interest, taxes, depreciation, and amortization. EBITDA treats the cost of running the company as an ordinary operating expense rather than an owner benefit, because a business at that size still needs to pay someone to run it after you leave. That is the measure private equity buyers, strategic acquirers, and their lenders work from.

The distinction matters because the multiples attached to each measure are not interchangeable. EBITDA already subtracts the cost of leadership, so the earnings figure lands lower and the multiples applied to it run higher. Applying an EBITDA multiple to an SDE figure produces a number with no basis in reality, and it is the single most common valuation mistake owners make on their own.

We determine which measure fits your business, and on some engagements we run both, because the right answer depends on who is most likely to buy you. From there we test every add back against what a lender will actually accept, compare your business to comparable sales in your industry and size range, and price it against the debt a buyer will have to carry. Learn about our valuations process.

Yes. A valuation is what produces the defensible number a buyer would pay for the business. When business owners try to avoid a valuation, that is a red flag and deals stall or never get off the ground. Learn about our valuations process.

The range comes from the market, and your position within that range comes from your business.

We pull comparable sales in your industry and your size range, which is what actually establishes the multiple range a business like yours can command. That data reflects what buyers have paid rather than what anyone thinks a business should be worth, and it is the foundation of a defensible number.

Where you land inside that range depends on the things a buyer prices as risk or opportunity. How much the business depends on you personally. Whether revenue is spread across many customers or concentrated in a few. How clean the financials are and how easily a lender can underwrite them. Growth and growth potential. The strength of your team. Two businesses in the same industry with the same earnings can land at opposite ends of the same range, and those factors are why.

That is also why a single published multiple is not worth much on its own. It tells you what the market pays broadly, not what your business will bring. We build the range from the comparables, then show you where you sit within it and what would move you higher.

Learn about our valuations process.

Start with a valuation. Knowing what your business is worth today, and why, gives you a foundation for every decision that follows, including whether now is even the right time. From there we walk you through preparation, pricing, marketing, and buyer selection. Learn about our valuations process.

The process runs in a consistent order. We value the business, prepare the financials and materials a buyer will scrutinize, price and position it, market it confidentially to qualified buyers, screen and vet everyone who shows interest, manage offers and negotiation, guide you through due diligence, and close. Preparation is the stage that does the most to protect your price, and it is where we spend real time with you. To learn more about this process, set up a call with us.

Preparation is where you make or lose money on the sale. Clean up the financials so a buyer's lender can underwrite them without a long list of questions, reduce how much the business depends on you personally, document how the work actually gets done, and address anything a buyer would discover in diligence before they discover it. The earlier you start, the more of that you can fix. If you have questions about this, ask us.

Ask yourself whether the business would run the same way if you handed the keys to your team tomorrow. If the answer is no, that is where the value is hiding. Build a team that operates without you, spread revenue across more customers so no single one carries too much, move toward recurring rather than one time revenue, and keep books a buyer can trust. Those four things move the number more than a single strong year does.

Expect to provide three years of tax returns and financial statements, current year interim financials, a list of assets and equipment (if relevant), your lease or property information, customer and revenue concentration detail, employee and compensation information, and any contracts that transfer with the business. We tell you exactly what to gather and in what order, so nothing surfaces late. If you have specific questions though, reach out to ask us.

Typically it can take six to twelve months assuming you are prepared and there are no unforeseen issues. Preparation drives the timeline more than the market does. A business with clean financials and low owner dependence moves faster because buyers and lenders have fewer questions.

Confidentiality holds when the process is built for it from the start. We market the business without identifying it, require a signed non-disclosure agreement before releasing anything meaningful, and control what each potential buyer sees and when. Your employees, customers, and competitors find out when you decide they do.

Three come up most often, and all three are avoidable with the right guidance. Waiting until you are ready to be done, which means selling from a tired position rather than a strong one. Accepting an inflated asking price from a broker who wanted the listing, which leaves the business sitting on the market and costs you the buyers most likely to close. And relying on the P&L as the whole financial picture.

A broker runs the entire sale so you can keep running your business. That means valuing it, preparing it, pricing it, marketing it confidentially, finding and screening buyers, managing offers and negotiations, coordinating with lenders and attorneys, and holding the deal together through diligence to closing. A big part of the work that decides your outcome happens before a buyer ever appears.

Do not choose the one who quotes the highest number. Ask how they arrived at the valuation, what they can defend to a lender, how many businesses they have actually closed in your size range, what credentials they hold, and how they protect confidentiality. A broker who tells you what you want to hear is not doing the job you are hiring them for. Learn more about our brokers here.

Most brokerages work on a success fee paid at closing, which means your broker gets paid when you do. Ask any broker to explain their structure in full before you sign, including anything payable regardless of outcome.

The better question is what a poorly run sale costs. A business priced too high sits on the market and loses the buyers most likely to close. A deal that falls apart in diligence costs months and often the buyer with it. A buyer who never had financing costs you the whole process. Any one of those outcomes costs far more than a fee.

A broker is worth it when the work actually gets done. Pricing the business on a number a lender will fund, preparing the financials so diligence does not turn into a renegotiation, screening buyers before they see anything confidential, and keeping the deal together when it gets difficult. That is where the money is protected. 90% of the businesses we list sell at or above the listing price, and that is because we price them accurately rather than optimistically.

If you are selling to a family member or a partner at a price you have already agreed on, you may not need a broker at all, and we will tell you that. For everything else, the cost of getting it wrong is the thing worth measuring. Contact RMBA with any additional questions.

This is an important question you should ask any broker you are evaluating. At RMBA, we market confidentially to buyers who are already looking, work our own network of individual buyers, private equity groups, and strategic acquirers, and reach beyond your local market. The goal is never the most inquiries. It is the right buyer with the means to close.

Every buyer signs a non-disclosure agreement (NDA) before receiving anything identifying about your business. After the NDA, they receive the CIM and supporting marketing materials from us. We confirm they have the financial capacity to complete a purchase at your price and the background to operate the business before releasing detailed financials. Information moves in stages, and you stay in control of each one.

The difference comes down to the size and complexity of the transaction, and the kind of buyer it will attract. Business brokerage typically covers small to mid-market, businesses sold to individual buyers, often financed through the SBA. The work centers on valuing the business accurately, marketing it confidentially, screening buyers who have the means to close, and holding the deal together through diligence. 

M&A advisory covers larger companies with more complex structures, sold to private equity groups, strategic acquirers, or other institutional buyers. Those deals involve more engineering. Deal structure, rollover equity, earnouts, and negotiation with buyers who do this professionally and repeatedly.

We do both, so you are not forced into whichever service a firm happens to offer. We handle brokerage and M&A work across our range, and on deals above $40M we typically refer you to an M&A firm built for that size. That is deliberate. A business at that level deserves an advisor whose practice is built around those buyers and those structures, and we would rather point you to the right fit than stretch to keep the engagement.

If you are not sure where your business falls, talk to us. We will tell you honestly which path fits your situation, including when that path is not us.

An offer starts the negotiation rather than ending it. We review it with you on price, structure, terms, and what the buyer is actually asking you to carry, then negotiate the points that matter. Once you accept, the deal moves into due diligence.

The buyer verifies everything you have told them. Expect deep review of financials, contracts, customer relationships, employees, and operations, often alongside their lender doing the same. This is exactly why we prepare the financials properly at the start, because diligence is where an unprepared deal falls apart.

Seller financing means you carry a portion of the purchase price and the buyer pays you over time after closing. Buyers and lenders often expect it, because a seller willing to carry a note is a seller who believes the business will keep performing. How much you carry and on what terms is negotiable, and it belongs in the conversation early rather than late.

Financing falling through, something surfacing in diligence that nobody prepared for, financials that do not support the asking price, or a seller who reaches the finish line and realizes they are not ready to let go. Most of it traces back to preparation, which is why we do that work upfront. A business priced accurately and prepared properly closes at a far higher rate.

We work very closely with CPAs and Accountants. A CPA is a tax expert, and that is a different job than a business broker. Their work all year is making your income look as small as the law allows, which is the opposite of what a valuation needs to show. Both matter to your business and they serve different purposes. A CPA tells you what you owe. A valuation tells you what someone will pay and what a bank will fund.