4 Valuation Mistakes Georgia Owners Make Before Selling
By VR Business Sales Atlanta
If you’re a business owner in Georgia considering a sale, one of the first questions you’ll ask is:
What is my business actually worth?
It’s a critical question—and the wrong answer can cost you time and money. Here are four valuation mistakes we frequently see that can delay your sale or reduce your final price.
Mistake 1: Confusing Revenue With Value
Revenue is not value. Buyers focus on Seller’s Discretionary Earnings (SDE)—the true cash flow of the business.
A business doing $2.5M in revenue with $500K in SDE may be worth $1.0M–$1.5M depending on risk factors and deal structure. SDE, not top-line revenue, is the foundation of value in most transactions.
Mistake 2: Using Online Multiples or Comparables Without Context
Multiples vary by industry, deal structure, and risk profile. What worked for a peer’s business—or what you see in an article—may not apply to your business. Growth trends, customer concentration, and management depth all impact valuation.
Every deal is different. Valuation should be based on market comps, SBA lender criteria, and actual deal data—not hearsay.
Mistake 3: Overlooking Addbacks
Net income on tax returns is not SDE. Addbacks help determine the real earnings available to a buyer.
Common addbacks include:
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Owner compensation (if not needed by buyer)
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Discretionary expenses (auto, phone, travel)
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One-time legal or setup costs
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Depreciation and interest
Failing to properly calculate addbacks results in undervaluation and missed opportunities.
Mistake 4: Not Accounting for Buyer Risk
Buyers and lenders assess risk. If your business has customer concentration, volatile cash flow, or is overly dependent on you, buyers will lower their offers—or avoid the deal altogether.
Lenders—especially SBA lenders—look for clean financials, recurring cash flow, and transferable operations. A risky business is harder to finance, reducing the pool of serious buyers.
What You Can Do Now
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Get a professional valuation from a broker familiar with buyer behavior, deal structures, and SBA underwriting.
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Clean up your financials to ensure accuracy and transparency.
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Build a transition plan to reduce owner dependency and improve buyer confidence.
Final Thought
You only sell once. The better prepared you are, the higher your chances of success. At VR Business Sales Atlanta, we help business owners understand true market value and prepare for a successful sale.
If you’re considering selling in the next 12–36 months, start with a valuation that reflects how buyers and lenders think—not how you hope the market will respond.