Torch Academy

The blog

Valuation, deal process, and what actually happens when businesses change hands.

  1. Business Valuation Multiples Explained (Why Some Sell at 2x and Others at 4x)
    Valuation Deep Dives · Ep 3

    Business Valuation Multiples Explained (Why Some Sell at 2x and Others at 4x)

    Two businesses with identical earnings can sell for prices that differ by 60 percent. The multiple is the reason — and it's a direct reflection of risk.

  2. How to Recast Financial Statements (The Step-by-Step Process Buyers Actually Use)
    Valuation Deep Dives · Ep 2

    How to Recast Financial Statements (The Step-by-Step Process Buyers Actually Use)

    Your tax return tells the IRS a story. Your recast financials tell a buyer a different one. Here's how to bridge the gap without tripping any wires.

  3. How Small Businesses Are Actually Priced
    Valuation Deep Dives · Ep 1

    How Small Businesses Are Actually Priced

    Three valuation methods answer the same question — what is this business worth? — and they rarely agree. Here's how each one works and when to trust it.

  4. What Your CPA Won't Tell You About Selling
    Ready to Sell · Ep 10

    What Your CPA Won't Tell You About Selling

    Your CPA is trained to minimize taxes. But when you sell, the goal shifts to maximizing net proceeds—and those goals can be in direct conflict.

  5. When Is the Right Time to Sell Your Business?
    Ready to Sell · Ep 9

    When Is the Right Time to Sell Your Business?

    The right time to sell isn't about one factor. It's about three: personal readiness, business readiness, and market conditions. All three have to align.

  6. Customer Concentration: The Silent Business Killer
    Ready to Sell · Ep 8

    Customer Concentration: The Silent Business Killer

    If your top customer is more than 20% of revenue, your valuation takes a 20-30% hit—if the buyer even agrees to buy. Here's how to diversify before you sell.

  7. How Your Commercial Lease Can Kill a Business Sale
    Ready to Sell · Ep 7

    How Your Commercial Lease Can Kill a Business Sale

    Your lease is your second-biggest asset in a sale. A bad lease—or a landlord who won't cooperate—can derail an otherwise perfect deal.

  8. Document Your Business Systems: SOPs That Sell
    Ready to Sell · Ep 6

    Document Your Business Systems: SOPs That Sell

    A well-documented business can be worth up to 3x more than one where everything lives in the owner's head. Here's how to build the playbook buyers want to see.

  9. Building a Management Team That Survives a Sale
    Ready to Sell · Ep 5

    Building a Management Team That Survives a Sale

    A buyer is acquiring a team, not just customers. If your key people leave after the sale, you've sold them a broken business.

  10. Reducing Owner Dependency: Why You Can't Be the Business
    Ready to Sell · Ep 4

    Reducing Owner Dependency: Why You Can't Be the Business

    If your business can't run without you, it's worth 40-60% less. Here's how to build systems and a team that operate independently.

  11. Cleaning Up Your Financials: Making Your Numbers Tell a Clean Story
    Ready to Sell · Ep 3

    Cleaning Up Your Financials: Making Your Numbers Tell a Clean Story

    A buyer is writing a check based on your financial statements. If those numbers look messy, they'll either walk away or deeply discount your valuation.

  12. The 2-Year Runway: Your Month-by-Month Timeline to Sale
    Ready to Sell · Ep 2

    The 2-Year Runway: Your Month-by-Month Timeline to Sale

    Selling a business well is a two-year project, not a two-month scramble. Here's the phase-by-phase playbook for getting ready.

  13. Is Your Business Actually Sellable?
    Ready to Sell · Ep 1

    Is Your Business Actually Sellable?

    Not every business is easy to sell. Here are the eight critical factors buyers evaluate—and how to fix the gaps before you go to market.

  14. Myth: The First Offer Is Always a Lowball
    Myth Busters · Ep 8

    Myth: The First Offer Is Always a Lowball

    Not true. 65% of small business deals close at or near the initial offer. Time on market kills value faster than negotiation wins.

  15. Myth: You Need a Broker to Sell Confidentially
    Myth Busters · Ep 7

    Myth: You Need a Broker to Sell Confidentially

    False. Online marketplaces have built-in confidentiality tools. A leaked sale can cost you 40% in value—here's how to prevent it.

  16. Myth: A Buyer Will Pay for the Potential
    Myth Busters · Ep 6

    Myth: A Buyer Will Pay for the Potential

    No, they won't. Potential is risk, and buyers pay only for proven performance.

  17. Myth: My Accountant Said It's Worth...
    Myth Busters · Ep 5

    Myth: My Accountant Said It's Worth...

    Your CPA minimizes taxes, not valuation. There's usually a 30-50% gap between what your accountant sees and what a buyer will pay for.

  18. Myth: I'll Sell When I'm Ready to Retire
    Myth Busters · Ep 4

    Myth: I'll Sell When I'm Ready to Retire

    That's exactly the wrong time. The moment you want out is when buyers will negotiate hardest.

  19. Myth: You Need a Broker to Sell Your Business
    Myth Busters · Ep 3

    Myth: You Need a Broker to Sell Your Business

    This isn't a myth—it's the truth. And it can save you $50K to $120K on your exit.

  20. Myth: I'll Just Sell to My Employees
    Myth Busters · Ep 2

    Myth: I'll Just Sell to My Employees

    The employee buyout sounds perfect in theory. Here's why it rarely works in practice.

  21. Myth: My Business Is Worth 10x Revenue
    Myth Busters · Ep 1

    Myth: My Business Is Worth 10x Revenue

    Revenue multiples are a dangerous shortcut. Here's why your business valuation depends on what you actually earn.

  22. Buyer's Rep vs. Seller's Rep (Who's On Your Side?)
    Quick Explainers · Ep 20

    Buyer's Rep vs. Seller's Rep (Who's On Your Side?)

    Understand the role of buyer's reps and seller's reps, why representation matters, and when you might represent yourself.

  23. What Is a Holdback? (And How to Negotiate One)
    Quick Explainers · Ep 19

    What Is a Holdback? (And How to Negotiate One)

    Understand holdbacks in business sales—how they work, why buyers want them, and how to negotiate reasonable terms.

  24. What Is Working Capital? (And Why It's Often Disputed)
    Quick Explainers · Ep 18

    What Is Working Capital? (And Why It's Often Disputed)

    Understand working capital in business sales, how it's calculated, and why it's one of the most common deal disputes.

  25. What Are Reps & Warranties? (Legal Promises About Your Business)
    Quick Explainers · Ep 17

    What Are Reps & Warranties? (Legal Promises About Your Business)

    Understand representations and warranties in purchase agreements—what you're promising, your liability, and how to limit exposure.

  26. What Is Escrow? (Protecting Both Sides at Closing)
    Quick Explainers · Ep 16

    What Is Escrow? (Protecting Both Sides at Closing)

    Understand escrow, why it's held, how long it lasts, and how to negotiate escrow terms that work for you.

  27. What Are Valuation Multiples? (How Price Is Determined)
    Quick Explainers · Ep 15

    What Are Valuation Multiples? (How Price Is Determined)

    Understand how valuation multiples work—the formula that determines what your business is worth—and what drives them.

  28. What Is Recasting? (Adjusting Financials to Show True Profit)
    Quick Explainers · Ep 14

    What Is Recasting? (Adjusting Financials to Show True Profit)

    Learn what recasting is, how it affects your valuation, and why you need to be careful not to be too aggressive.

  29. What Is a Transition Period? (How Long Do You Stay?)
    Quick Explainers · Ep 13

    What Is a Transition Period? (How Long Do You Stay?)

    Understand transition periods in business sales—what they involve, how long they typically last, and how to negotiate compensation.

  30. What Is Goodwill? (The Intangible Value of Your Business)
    Quick Explainers · Ep 12

    What Is Goodwill? (The Intangible Value of Your Business)

    Understand goodwill, why it's the majority of what you're selling, and how to build it before you exit.

  31. What Is a CIM? (Confidential Information Memorandum)
    Quick Explainers · Ep 11

    What Is a CIM? (Confidential Information Memorandum)

    Learn what a CIM is, why it matters in business sales, and how it helps you attract serious buyers and better valuations.

  32. How Are Small Business Sales Funded? (The Capital Stack)
    Quick Explainers · Ep 10

    How Are Small Business Sales Funded? (The Capital Stack)

    Understand where the money comes from in a small business sale—SBA loans, seller financing, and buyer cash.

  33. What Is a Business Valuation? (And Which Type Do You Need?)
    Quick Explainers · Ep 9

    What Is a Business Valuation? (And Which Type Do You Need?)

    Understand the three types of business valuations, what each costs, and how to choose the right one for your situation.

  34. What Is EBITDA? (And When to Use It)
    Quick Explainers · Ep 8

    What Is EBITDA? (And When to Use It)

    Learn what EBITDA is, how it differs from SDE, and when larger businesses use it as a valuation metric.

  35. What Is a Letter of Intent? (And Why It Matters)
    Quick Explainers · Ep 7

    What Is a Letter of Intent? (And Why It Matters)

    Understand what a Letter of Intent is, which terms are binding, and how it sets the stage for the rest of your sale.

  36. What Is a Non-Compete? (And How to Negotiate One)
    Quick Explainers · Ep 6

    What Is a Non-Compete? (And How to Negotiate One)

    Understand non-compete agreements in business sales—what they cover, what's reasonable, and how to protect yourself.

  37. Asset Sale vs. Stock Sale (What's the Difference?)
    Quick Explainers · Ep 5

    Asset Sale vs. Stock Sale (What's the Difference?)

    Learn the difference between selling your business assets and selling your company stock, and understand the major tax implications of each.

  38. What Is Due Diligence? (And How to Prepare)
    Quick Explainers · Ep 4

    What Is Due Diligence? (And How to Prepare)

    Understand what due diligence is, what buyers will investigate, and how to prepare your business so the process goes smoothly.

  39. What Is an Earnout? (And How to Negotiate One)
    Quick Explainers · Ep 3

    What Is an Earnout? (And How to Negotiate One)

    Understand how earnouts work in business sales, why buyers want them, and how to protect yourself when a portion of your payment is performance-based.

  40. How to Sell Your Business Yourself (The DIY Selling Guide)
    Quick Explainers · Ep 2

    How to Sell Your Business Yourself (The DIY Selling Guide)

    Explore the six-step process for selling your business without a broker. Learn the real costs, what it takes, and when DIY selling makes sense.

  41. What Is SDE? (Seller's Discretionary Earnings Explained)
    Quick Explainers · Ep 1

    What Is SDE? (Seller's Discretionary Earnings Explained)

    Understand SDE, the metric that actually determines what your business is worth to a buyer. Learn how it's calculated and why it matters more than net income.