What makes a valuation 'defensible'?

Documented methodology and documented assumptions. A defensible valuation can be handed to a buyer, a partner, a lender, an attorney, or the IRS, and the reasoning holds up under questioning. An unsupported number cannot.

What are add-backs, and why do they matter?

Add-backs are owner expenses a new owner would not carry, added back to earnings to show what the business truly generates. Legitimate, well-documented add-backs can move a valuation substantially. Undocumented ones get stripped out by the buyer.

What is the difference between EBITDA and SDE?

SDE (seller's discretionary earnings) includes the owner's compensation and is typically used for smaller owner-operated businesses. EBITDA excludes it and is typical in the lower middle market. Which one applies affects the multiple, and therefore the price.

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Business Valuation Services

A credible valuation is the foundation of nearly every major business decision: selling, buying in a partner, planning your estate, or resolving a dispute. Brown Business Advisors delivers independent, well-documented valuations built on sound methodology, not guesswork.

In Brief

Brown Business Advisors delivers independent, defensible business valuations for exit, transactions, buy-sell agreements, gifting and estate planning, and disputes. We analyze EBITDA and SDE with normalized add-backs, apply the income, market, and asset approaches, benchmark against comparable transactions, and document every assumption in plain language.

Overview

Rigorous Analysis, Clearly Explained

We analyze your financials, normalize for owner add-backs, and apply the income, market, and asset approaches appropriate to your situation. The result is a defensible value range you can bring to a buyer, a partner, a lender, an attorney, or the IRS, with the reasoning documented in plain language.

What's Included

EBITDA and SDE analysis with normalized add-backs

Income, market, and asset-based valuation approaches

Industry multiple and comparable-transaction benchmarking

Valuations for exit, buy-sell, gifting, and estate planning

Litigation, partnership, and dispute-support valuations

Clear written report with documented assumptions

In Short

One Number, Many Decisions

A defensible valuation removes the guesswork from your most important decisions. For owners who are actively preparing to sell, this analysis pairs directly with our broader Business Valuations & Sales engagement. Want to know your number before you need it? Contact us to schedule your valuation.

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Common Questions

Business Valuation, Answered

What makes a valuation 'defensible'?: Documented methodology and documented assumptions. A defensible valuation can be handed to a buyer, a partner, a lender, an attorney, or the IRS, and the reasoning holds up under questioning. An unsupported number cannot.
What are add-backs, and why do they matter?: Add-backs are owner expenses a new owner would not carry, added back to earnings to show what the business truly generates. Legitimate, well-documented add-backs can move a valuation substantially. Undocumented ones get stripped out by the buyer.
What is the difference between EBITDA and SDE?: SDE (seller's discretionary earnings) includes the owner's compensation and is typically used for smaller owner-operated businesses. EBITDA excludes it and is typical in the lower middle market. Which one applies affects the multiple, and therefore the price.

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