Webinar: Acquisition Due Diligence: Owner Add-Back Analysis

Acquisition Due Diligence: Owner Add-Back Analysis - Overview: When analyzing a small business for acquisition, understanding owner add-backs is one of the most critical steps in normalizing earnings. These adjustments can dramatically impact the business’s reported profitability and ultimately, the valuation and financing structure. In this session, we will walk through how to identify, verify, and validate owner add-backs during financial due diligence, helping buyers ensure they’re paying for real, recurring earnings — not inflated numbers. Register: https://us06web.zoom.us/webinar/register/###-###-#### /WN_t83aVxKuQxaTe9RuehZVdQ - What You’ll Learn: Defining Add-Backs: What qualifies as a legitimate add-back (e.g., owner salary, one-time expenses, personal or discretionary costs) — and what doesn’t. Normalization of Earnings: How to reconcile EBITDA and SDE (Seller’s Discretionary Earnings) for valuation accuracy. Verification Techniques: How to trace add-backs through general ledger data, tax returns, and bank statements to confirm they’re valid. Common Red Flags: Add-backs that often mislead buyers — such as recurring “one-time” expenses, missing payroll allocations, or disguised personal spending. Impact on Valuation & Financing: How SBA lenders and buyers view add-backs during underwriting and how they can affect the deal multiple. - Why It Matters: Many deals fall apart because of disputed or overstated add-backs. Knowing how to properly validate them ensures you’re basing your offer and financing on reliable, recurring earnings. This analysis protects your downside risk and strengthens your position in negotiations. This Session is a part of the 2025 Business Acquisition Webinar Series. Hosted by Patrick of O'Connell Advisory Group Connect with Patrick O'Connell: http://www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=patrick-o-connell-3b235177 About O'Connell Advisory Group: https://oconnelladvisorygroup.com/