How To Increase Your Business Value

Are you thinking about selling your business but unsure if you’re getting the full value? Many business owners are leaving money on the table because they don’t understand the power of add-backs.

What Are Add-Backs?

Add-backs are legitimate expenses in your Profit & Loss statements that don’t reflect the ongoing costs of running your business. These are costs a new owner wouldn’t need to pay, meaning your true profit—and the value of your business—is higher than it looks on paper.

Here’s the catch: your accountant prepares your figures for the tax man with a focus on having the lowest possible profit. While this is great for taxes, it doesn’t show your business’s real earning potential. This is where I step in—to help you understand add-backs and adjustments for the purpose of selling your business.

Common Add-Back Examples

• Owner’s personal expenses, like private travel or personal vehicle costs.

• One-off or non-recurring costs, such as legal fees or equipment repairs.

• Depreciation of capital purchases which is a non-cash expense.

• Interest charges that a new owner may refinance or not carry.

• Advertising that hasn’t been effective can be removed by a new owner.

• Excessive or discretionary spending is unnecessary for daily operations.

Why Add-Backs Matter for Your Sale

Add-backs increase your business’s net profit for valuation purposes, which directly boosts your sale price. Buyers pay for future profit potential, not past expenses that won’t continue under new ownership.

For example:

• Your business shows a net profit of $150,000.

• Add-backs include $10,000 depreciation, $5,000 interest, and $15,000 ineffective advertising.

• Adjusted profit for valuation: $180,000.

• If your industry multiple is 3×, your business value jumps from $450,000 to $540,000.

• Even with a conservative multiple of 2×, your value rises from $300,000 to $360,000.

Just by understanding and applying add-backs, you could unlock tens of thousands of dollars more from your sale.

How a Business Broker Helps

As a licensed business broker, I don’t just list your business—I help you prepare it for sale to maximise its value. From reviewing your financials and identifying valid add-backs to presenting your business in the most compelling way to buyers, I ensure you get the price your business deserves.

If you’ve been thinking about selling—or are just curious what your business could be worth—I offer a free, no-obligation business appraisal. Together, we’ll uncover your business’s hidden value and make sure you don’t leave money on the table.

Ready to Unlock Your Business’s True Value?

📞 Contact me today and start your journey toward a successful, high-value sale.