How does Baton determine the price of your business?

We use a market multiple approach based on your business's financial statements. This means we analyze your earnings, adjusted cash flow, and other key financial indicators to determine a fair and competitive price. Your adjusted cash flow is the key metric, determined by taking net income and adding back any personal or discretionary expenses.

The adjusted cash flow multiple is an essential factor in understanding your business's value. Here's a breakdown:

• Calculation: The cash flow multiple is calculated by dividing your business's valuation by the adjusted cash flow.

• Typical Range: Most cash flow multiples range between 2 and 4. However, what’s appropriate depends on factors such as growth, industry, size, and more.

Why is the Cash Flow Multiple Important? The cash flow multiple gives both you and potential buyers a quick and effective way to gauge the value of your business relative to its earnings. It helps provide a clear, data-driven valuation that aligns with market expectations, ensuring a more transparent and appealing offer to buyers.

What are addbacks and how are they determined? Addbacks are discretionary or non-essential expenses that appear on your P&L statement but wouldn’t apply to a new owner. These can include one-time costs or personal expenses unrelated to daily operations. By adding them back to your net income, we present a clearer picture of your business’s true earnings to potential buyers.

• After 6-8 weeks on the market with minimal traction, lowering the price has historically been the most effective way to attract buyers.

• We will discuss the reasons for the updated price with you in detail, ensuring it makes sense for your goals.

• Following a price adjustment, we proactively reach out to buyers who previously showed interest to inform them of the new, more attractive offer.