Value and offer notes
Recast Owner Earnings Before Setting a Sale Price
Your bank withdrawals are not the same as business earnings. San Jose Business Brokers Ltd connects sellers with a valuation partner to build a clearer picture of the income a buyer can verify.

Begin with the accounts, then make adjustments
Recasting starts with the reported profit and loss statement. Identify costs that are personal, nonoperating or genuinely unusual, and keep evidence for each adjustment.
Proceeds from selling equipment or receiving a loan are not ordinary operating earnings. A buyer will check the story against tax returns, statements and the balance sheet.
Choose the earnings view that fits the buyer
Seller discretionary earnings often describes the benefit available to one working owner. Adjusted EBITDA considers earnings after the necessary staff and management are paid appropriately.
If you leave and a manager must replace you, that wage does not disappear. Explain your role before treating your full compensation as an addback.
- Identify the tasks performed by the owner.
- Estimate the cost of replacing necessary work.
- Separate personal perks from ordinary business expenses.
Check the costs hidden behind an adjustment
Adding depreciation back does not remove equipment maintenance or replacement needs. A capital intensive company requires a realistic discussion of spending needed to sustain its results.
If the business pays rent to an entity you own, review a market rent. A favorable internal rent can overstate what a buyer will earn under a new lease.
Keep value separate from take home proceeds
Business value, debt payoff and cash distributed at closing are different figures. Taxes, fees and retained working capital can change what you keep even after the price is agreed.
Use the valuation to test a sale plan, not to promise a fixed result. Buyer demand, financing and what diligence verifies still affect the eventual terms.
Keep the sale moving
Use the valuation form to outline your sale, or call (408) 555-0179.