The key issues that influence a company’s value when there are two working owners:
1. What is the profit level of the business after allowing for the second partner’s salary Sellers Discretionary Earnings (SDE)?
2. Do a few customers dominate the sales? I see some great companies where one customer is over 50% of the sales volume. In this case if the biggest single customer left, the company’s value would collapse?
3. Could the minor working partner leave the company and start his own business, as an alternative to buying the majority partner out?
4. Will the business operation continue after either one of the partners or key salesperson leave?
5. Is the business is being sold to a third outside party, instead of a partner? This creates a different value.
6. Will key employees stay on?
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