Normalize the economics
Rebuild revenue, expenses and owner adjustments using source records. Include costs you will actually incur after acquisition.
Choose the right valuation frame
Small established businesses may be easier to underwrite on normalized owner earnings or EBITDA, while high-growth recurring-revenue businesses may use revenue-based market references. The denominator should fit the economics.
Build a downside case
Estimate what happens if growth stops, a major customer leaves, traffic falls or operating costs rise. Your price should still make sense across plausible outcomes.
Account for transition and reinvestment
Include immediate working capital, inventory, development work, hiring, migration and other costs needed after closing.
Set a walk-away price
Decide the maximum before negotiation becomes emotional. A good business can still be a bad acquisition at the wrong price.