Earnings quality before price

Mid-market transactions frequently open with a price expectation and work backwards. The more useful sequence begins with the durability of earnings: which revenue recurs, which margin depends on a single relationship, and which costs are structurally absent from the current run rate.

Owner-managed businesses are particularly exposed here, because the founder's own capacity is often the unpriced input. Where that capacity is withdrawn at completion, the earnings base changes on the first day of the new ownership.

We ask sellers to publish their own quality-of-earnings view before going to market. It shortens diligence, narrows the negotiation to real issues, and materially reduces the risk of retrade.

Sample editorial content prepared for this Skarsity template demonstration.