Business Value

Reasonable Compensation

Reasonable Compensation

One of the most subjective and discretionary expenses for many small closely held businesses or professional practices is owner compensation. Reasonable compensation is a key assumption in the valuation model as it can have the most impact on the profits of the closely held business. This is due to the fact that compensation recorded in the Company’s books and records and presented in the financial statements is not always at market rates and it is …

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Restaurant Woes - Serving up a Disappointing Retirement Outlook

Restaurant Woes: Serving up a Disappointing Retirement Outlook

It seems odd that a business owner would work his or her whole life on their business and then determine the business’s value based on what they “think “the business is worth, or an industry rule of thumb. If the sale of your business is going to fund your retirement you should know what your business is worth. Mr. Jones, A Quick Service Restaurant owner, has determined (based on industry rules of thumb, and conversations …

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