Sneaky Listing Brokers

February 20, 2024

by a searcher from University of Oxford in St. Petersburg, FL, USA

Is anyone else seeing businesses listed recently using their projected revenues and cash flows, rather than the historical? 3 deals I've looked at in the last 2 weeks on Website Closers have been listed with an asking price that's a multiple of projected cash flows, that are WILDLY out of step with historicals.

For example, the one I got an OM for this morning listed: 3M revenue, $2.1M cash flow, based on 2024 "projections", but neither 2022 nor 2023 even cracked $1M in revenue. I find it an extremely annoying waste of time.

2 Likes

8 Replies

140 Views

Replies

Reply by a lender
in United States

Welcome to the journey of exploring business listings. ^redacted‌. We're looking for transparent and honest options from the start. Sometimes, qualified buyers face a challenge. They can't get a bank loan supported by the SBA. Why? The business details in the listings don't match the actual tax returns. That's the hurdle we've wished to overcome for a long time. This is why I ensure my business-buying clients are thoroughly vetted for financing with a proof of funds letter presented to the seller/listing broker out of the conversation gates. If, at that point, a seller doesn't want to share pertinent details applicable to the bank saying yes, we move on to the next listing. The more prepared searchers/my clients are out of the gates, the faster the brokers/sellers respond. In their defense, brokers are inundated with unqualified searcher calls daily. ‌

Reply by an intermediary
from Rockhurst College in Overland Park, KS, USA

Maybe business just got a new contract (or of course maybe not). I had a business listed for sale & they got 2 new contracts that tripled their top line. So of course they understandably decided to keep the biz. In that situation, if they didn't want to keep it, would have suggested to run with it for another year or 2 then sell after showing increased CF.

+6 more replies.

Join the discussion