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The Business Journals: A Business-Buyer’s Guide to Profitability

Calhoun Companies president and co-owner, Andy Kocemba, is a contributing writer for The Business Journals. Each month, he offers advice on buying and selling small to mid-size businesses.

 

Biz Journals Profitability

Whether you are beginning the search for a business, or have been looking for some time, it is important for you to understand what profitability measure the seller and broker are using.

 

If you have spent any amount of time looking at businesses for sale, you have likely noticed that the profitability of a business can be stated using a variety of terms.

Whether labeled Cash Flow, Sellers Discretionary Earnings, Adjusted Net Profit, or EBITDA, the measurement is of the utmost importance to business buyers. This profitability will not only provide return on investment. It will also, in most cases, be the income that supports an owner and his or her family.

For various accounting and tax-planning reasons, small business owners will draw profits from their company in a variety of ways. It is not sufficient to simply look at the bottom line to determine the profitability of a company. You also have to examine the expenses.

 

Read the rest of the business-buyer's guide to profitability on The Business Journals website.

 

calhouncosandykocembaAndy Kocemba is president and co-owner of Calhoun Cos., a top business brokerage firms in the Upper Midwest. Calhoun Cos. has been connecting buyers and sellers since 1908, working with small- to medium-sized businesses across allindustries. A graduate from Bethel University, Kocemba joined Calhoun Cos. in 2003 as a sales agent before buying the business in 2011. He is a member of the International Business Brokers Association, Minnesota Chamber of Commerce, and Better Business Bureau.

Read More from Andy:

 

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