Tip #25: Burying excessive personal expenses in the business financials can lower business value!

Burying excessive personal expenses in the business financials can lower business value!

The most popular method of valuing a business uses a multiple of earnings over a period of years.

Business owners should be aware of that while attempting to reduce the bottom line with personal expenses to minimize taxes. Though there are a number of deductions that may be added back to determine true cash flow, not all add-backs are considered legitimate by buyers or lenders.

Being too aggressive in minimizing taxes today may cost a business owner big dollars at closing.

Sign up to receive Toons ‘N Tips by eMail
Learn more about buying a business
Learn more about selling a business