Seller's Discretionary Cash Flow
Business Buyer's Best Friend
Widely used as the basis to value and price businesses for sale, the seller's discretionary cash flow (SDCF) is defined by the International Business Brokers Association:
Why SDCF is important to you
For you as the business buyer, SDCF represents all the available cash flow from the business. SDCF is what the business can give you to meet the
ValuAdder business valuation software gives you all three: a set of proven methods to quickly calculate what the business is worth. You can determine the SDCF for any business and assess it across a number of key financial and operational performance factors.
See what the business is worth. Spot what drives business value. Make a fact-based business purchase decision.
In addition, you can do very quick market comparisons across over 425 industries. The market comparisons also save you time – you can rapidly screen out businesses for sale to see which ones are overpriced and spot the bargains.
You can also calculate the value of business goodwill – which helps both during the seller negotiations and purchase price allocation. All in a few keystrokes!
Structuring your business purchase offer
To close a successful deal you need to decide on both the purchase price and terms of your offer. Your goals are:
ValuAdder gives you an important deal structuring calculation: define your purchase price and terms, and see what business SDCF is needed to make the deal work.
As you change your inputs, ValuAdder instantly recalculates the required cash flow. Everything is considered automatically: business purchase price, working capital, transaction costs, seller and bank financing, your salary, return on your down payment investment and capital expenses you will need.
Now you can ensure that any offer you make will work for you!
See how to price any business and put together a successful deal: