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Overview of business acquisition financing strategies

Business Acquisition Financing Strategies

ETA /

Financing a business acquisition can be both thrilling and intimidating. The process involves navigating complex financial structures, understanding the cost of capital, and determining the best sources of funding to reach your objective.

Unlike the straightforward nature of something like a home mortgage, business acquisition financing is much more complicated, often involving a blend of debt and equity. This blend, known as the capital stack, is used to optimize both affordability and long-term growth.

Let’s explore the capital stack, its components, and how to strategically finance your next acquisition.

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Businessperson calculating net working capital by stacking coins, important for managing liquidity during business acquisitions.

Calculating Net Working Capital: The Ultimate Deal Killer

Leave a Comment / ETA, SMB /

Business acquisitions often fail due to misunderstandings surrounding net working capital (NWC). Understanding how to calculate net working capital and managed can make or break a deal, especially when purchasing a business.

In this guide, we’ll explore why NWC matters, how to calculate it effectively, and what to consider during the due diligence process. Whether you’re a buyer or seller, understanding net working capital is critical to ensuring a smooth and fair transaction.

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how to buy a med spa

How to Buy a Med Spa

Leave a Comment / ETA, Podcast, SMB /

In this episode of the ‘I Bought a Business’ podcast, Chris Barrett, CPA of Midwest CPA, interviews Dhruv Patel, a former Army Medical Corps officer who successfully transitioned into Med Spa acquisition entrepreneurship. Together, they explore Dhruv’s journey from military service to owning a Med Spa. Additionally, they discuss the steps involved in buying a Med Spa and the challenges Dhruv faced during the acquisition process. 

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Entity Structure for Small Business

Choosing the Best Entity Structure for Your Small Business

Leave a Comment / ETA, SMB, Tax /

Struggling to decide the best entity structure for your small business? This guide breaks down the benefits and tax implications of C-Corps, Partnerships, S-Corps, and Sole Proprietorships to help you make an informed decision. The right entity structure can significantly impact your business’s tax obligations, growth potential, and overall operations. Let’s dive in and explore which option best fits your needs.

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Asset Sale vs Stock Sale

Asset Sale vs Stock Sale: What Entrepreneurs Need to Know When Acquiring a Business

ETA, Tax /

When buying a business, one of the key decisions you’ll face is whether to structure the deal as an asset sale vs stock sale. This choice can significantly impact both the buyer and the seller, particularly in terms of taxes and liabilities.    Understanding the nuances of each option will help you make an informed

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Sell-side quality of earnings

Sell-Side Quality of Earnings Report and 6 Reasons to Get One

ETA, SMB /

When selling a small business, two crucial factors significantly impact the purchase price:

Earnings:
The amount of earnings your company generates is a key determinant, typically measured as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). A sell-side quality of earnings analysis presents an opportunity to enhance both the quantity and quality of these earnings.

EBITDA can be increased by identifying adjustments to your financials that a new buyer should not anticipate incurring. This includes one-time expenses or events, personal expenses that the owner ran through the business, or the normalization of recent changes to business operations.

When the buyer is performing due diligence they are going to be looking for adjustments that will favor them. However, they are not going to point out to you adjustments that will be in your favor it’s up to you to do that.

Sell-Side Quality of Earnings Report and 6 Reasons to Get One Read More »

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