The Three Costly Mistakes SME Owners Make When Valuing Their Business

Stop Guessing: The Three Costly Mistakes SME Owners Make When Valuing Their Business

Introduction

You poured years of effort and capital into building your business-be it a profitable Laundromat or a thriving Liquor Store. When it's time to sell, your biggest asset is on the line. Yet, most small-to-medium enterprise (SME) owners lose significant profit because they rely on guesswork or general advice for valuation. At LINORP, we've managed over 1,200 successful sales, and we know exactly where the money is left on the table.

Mistake 1: Ignoring Industry-Specific Multipliers

A generic formula (like a simple 3x EBITDA) simply doesn't apply equally across sectors.

• The Problem: Your business's true value lies in its niche metrics. A broker who understands Gas Stations knows how to value the fuel contract and convenience store revenue separately. A broker valuing a Car Wash must understand equipment depreciation and water usage volume.

• The LINORP Solution: We use proprietary, industry-specific comparables derived from our 1,200+ successful transitions. We ensure every unique asset and cash flow stream is accounted for to derive the maximal, accurate price.

Mistake 2: Failing to Prepare Financials for Due Diligence

Buyers don't look at P&L statements the way business owners do. If your books haven't been professionally "recast," buyers can't see the full profit potential.

• The Problem: Business owners often run personal expenses through the business (owner salaries, family travel, discretionary spending). Buyers deduct these, thinking the profit is lower.

• The LINORP Solution: We prepare a transparent financial package, expertly "adding back" legitimate discretionary expenses to clearly demonstrate the Seller's Discretionary Earnings (SDE). This ensures buyers see the highest possible profitability, securing a higher offer.

Mistake 3: Relying on Simple Listings, Not Specialized Marketing

A perfect valuation means nothing if the right buyer never sees it.

• The Problem: Listing on general public marketplaces leads to broad exposure but low-quality leads and missed opportunities. Your ideal buyer might be a regional investor who only looks through specialized channels.

• The LINORP Solution: We market your asset exclusively to our network of pre-qualified capital seeking specific types of retail and service SMEs. This targeted approach creates competition, which is the fastest path to a premium sale price.

Conclusion

Don't settle for guesswork on your most important financial transaction. Choose the specialized expertise and proven track record of LINORP.