- How2Exit DEEPER dive - SMB M&A Insights and Inspiration
- Posts
- Your Business Isn't Worth What You Think
Your Business Isn't Worth What You Think
What you missed on How2Exit This week
Ronald Skelton
February 18, 2025
Sponsors:
DueDilio is your go-to marketplace and advisory service for all things related to small business acquisitions.
and
Final Ascent, a premier boutique professional services firm specializing in mergers and acquisitions, exit strategies, and growth consulting tailored for lower middle-market firms across the U.S.
E268: Your Business Isn't Worth What You Think! (How to Fix It Before You Sell)f
About the Guest:
Alina Rivera is a business valuation expert and the founder of Advising Puerto Rico, a firm specializing in business advisory, financial planning, and fractional CFO services. With a background in auditing, forensic valuation, and advisory work for global firms like BDO, she helps business owners understand the true worth of their companies and prepare for growth, financing, and eventual exit. Rivera is also a strong advocate for using business valuation as a proactive tool rather than just a transaction necessity.
Summary:
In this episode, the How2Exit podcast welcomes Alina Rivera, founder of Advising Puerto Rico, to discuss business valuation, exit planning, and the economic landscape of Puerto Rico. With a deep background in accounting, advisory, and forensic valuation, Rivera shares how businesses can strategically prepare for growth, optimize their valuation, and avoid common pitfalls when planning an exit. The conversation also explores Puerto Rico’s unique economic incentives, its impact on business valuations, and the importance of having a fractional CFO. Rivera emphasizes that businesses should not wait until they are ready to sell to start valuing their company—the process should be part of a continuous strategy for financial health and scalability.
Key Takeaways:
Business Valuation as a Strategic Tool – Business owners often overestimate their company’s worth. Regular valuations help align expectations and identify key value drivers.
Exit Planning Should Start Now – Waiting until retirement or an emergency to prepare for an exit can result in financial disaster. A business should always be sale-ready.
Puerto Rico as a Business Hub – The island offers tax incentives for companies that export services, making it an attractive option for entrepreneurs, including those in tech and finance.
Fractional CFOs Drive Growth – Businesses earning between $1M-$10M benefit significantly from hiring a fractional CFO to manage cash flow, forecasting, and growth strategy.
Common Valuation Mistakes – Owners often base their valuation on industry hearsay or personal financial needs rather than market data and financial fundamentals.
Owner Dependency Kills Business Value – A company reliant on its owner for operations, sales, and decision-making is much harder to sell and less attractive to buyers.
Financial Planning & Process Documentation – Having structured financial statements, KPI tracking, and documented workflows is critical for growth and eventual sale.
The Risks of Poor Succession Planning – Businesses without a succession plan risk collapse when an owner unexpectedly leaves due to illness or other circumstances.
Article:
How to Avoid a Business Valuation Nightmare – And Why Puerto Rico Might Be Your Next Big Opportunity
Your net worth will never be greater than your network:
Network and hang out with other Acquisition Entrepreneurs and professionals Twice a Month - First and Third Tue, 8am PST: Join Here
Attention Business Brokers, Advisors, Acquisition Entrepreneurs, and SMB Owners!
Do you want to stay ahead of the game in the SMB M&A market? The Hub is the solution you need! This curated newsletter brings you the best highlights from blogs, podcasts, YouTube, and news sources, all in one place. Growth & Acquisitions
Founding Member Shout-Out (Still room here -$400 one time)
Shout out to our new founding member. With over 30 years in M&A, this company offers the lowest priced (way undervalued) course on helping you buy good businesses. Very underpriced - get it now before they finish upgrading the site and very likely up the pricing.
