Why adjustments matter
In SME transactions, reported EBITDA rarely tells the full story. Owner compensation, one-off expenses, and non-recurring items all need to be normalised to reflect the true earning power of the business.
Common adjustments
The most frequently accepted adjustments include: above-market owner compensation, one-time legal or consulting fees, personal expenses run through the business, and non-recurring restructuring costs.
Credibility is key
Buyers will push back on aggressive adjustments. Every add-back should be clearly documented, defensible, and presented with supporting evidence. An advisor can help you strike the right balance between maximising value and maintaining credibility.
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