A professional business valuation appointment with an experienced Illinois business broker is the most valuable first step any business owner considering a sale can take. The more prepared you are, the more accurate and actionable the valuation will be. Here is how to prepare.
Financial Documents to Gather
Bring (or be ready to share electronically): the most recent three years of business tax returns, the most recent 12 months of monthly P&L statements, your year-to-date P&L, and a list of owner benefits that run through the business (compensation, health insurance, retirement contributions, personal vehicle, phone, etc.). If you have multiple revenue streams, bring a breakdown showing revenue by category. The valuation is only as accurate as the financial information it is based on.
Operational Information to Prepare
Be ready to discuss: how long the business has been operating, how much time you personally spend in the business, your role vs. staff roles, the status of your lease (term remaining, monthly rent, renewal options), your employee count and key staff, any significant customer relationships and their concentration in your total revenue, and any known issues with the business (pending lease renewal, aging equipment, regulatory matters).
The valuation meeting is also a two-way conversation — it is your opportunity to ask the broker about their experience selling similar businesses in Illinois, their marketing approach, their buyer network, and their success rate. Come with questions and treat it as an interview of the broker as much as a consultation for you.
Recast Seller’s Discretionary Earnings, then apply a planning multiple for this Illinois business. Replacement labor is subtracted. This is a planning tool, not an appraisal.
Before debt, working-capital peg, holdback, and tax. Educational only.
How Illinois buyers put a number on how to prepare for a business valuation appointment
This page is the valuation guide. It is not the sale-process playbook. Seller’s discretionary earnings (SDE) is the cash a full-time working owner can take after you normalize the books. Start with the tax return. Add owner pay and one-time costs. Subtract the wage you must pay to replace the owner.
SDE line items buyers actually use
- Reported net profit (tax return, not the marketing P&L)
- + Interest expense
- + Income taxes (not payroll, sales, or property tax)
- + Depreciation and amortization
- + Owner W-2, bonuses, and payroll taxes on the owner
- + Discretionary owner benefits that a buyer will not keep (auto, personal travel, family on payroll with no role)
- + Accepted one-time or non-recurring expenses
- − Market-rate replacement labor for owner work that will not transfer
- = Seller’s Discretionary Earnings (SDE)
Documents to gather this week
- Three years of signed business tax returns and matching P&Ls
- Year-to-date P&L, balance sheet, and three months of bank statements
- Current lease, amendments, and a plain-English remaining term
- License and permit list, including who holds each card
- Top-customer concentration (names redacted until an NDA)
A simple Illinois close calendar
Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.
Related pages on this site
Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.
Questions
No. This is education and planning math. A professional opinion of value is a confidential conversation. We work on a success fee if you engage a sale process. There is no file-upload portal.
Start with adjusted seller’s discretionary earnings, then a vertical planning band. A marketplace average is context, not your quote.
Personal professional licenses do not transfer. Municipal registrations and state notices have their own calendars. Confirm the path before you grant exclusivity.
Most prepared Main Street sales take about six to twelve months from cleanup to close. License transfers, landlord consent, and SBA underwriting add weeks.
CBS-1 is the Illinois bulk-sale notice. File it at least ten business days before an asset transfer that meets the statute. Late filing can put Illinois tax risk on the buyer.