Business Valuation in Arizona
Eddy Roche, Associate Broker · AZ license BR579487000 · HUB AZ / Sunbelt Arizona
I do not send a teaser number from a website form. A valuation is a worksheet. I rebuild Seller's Discretionary Earnings from your tax returns and profit-and-loss statements, then I price to what a buyer, a landlord, and a liquor transfer can actually support.
What SDE means
Seller's Discretionary Earnings is the cash a full-time owner-operator would take from the business after we put owner pay and discretionary spending back on a clean line. Buyers price most Arizona owner-operated files on that number. They do not price on last year's revenue, and they do not price on a teaser from a website form.
I rebuild SDE from the tax returns and the P&Ls. Net income is the start, not the answer. Owner salary goes back in. One-time or personal items get reviewed one by one. What remains should be a number a buyer, a lender, and a landlord can sit with.
If the books mix household spend with the operating statement, we document it. I would rather do that on the worksheet than watch a buyer unwind the same items in diligence and walk.
Add-backs honestly
An add-back is an expense that goes away, or changes, when you leave. Owner compensation. A one-time legal bill. A truck that is on the books and not needed for the next owner. Personal insurance run through the company.
Honest add-backs have a paper trail. A buyer will ask for the invoice, the tax return line, or the recurring pattern. If I cannot show why the dollar comes out, it stays in the expense column. Inflated add-backs do not survive diligence. They just waste a listing term.
I do not pad the worksheet to hit a number you hoped for. I will tell you which add-backs I will defend and which ones I will not.
Multiples follow risk
The multiple is not a printed table. It follows risk. Category matters. So does how much of the business walks out when you do, how long the lease has left, whether a license transfers, and whether the books can be rebuilt without a fight.
A manager-run service company with recurring work and a transferable book is a different conversation than an owner-dependent restaurant with one year on the pad. Same SDE math. Different risk. Different buyer. Different price.
I will not publish a grid of invented multiples or a sold-count to make the page look like a report. The file in front of us sets the range. If a broker quotes a multiple on the first call without the returns, treat it as a listing pitch.
Lease, license, and transferability
A buyer is buying what they can step into. If the landlord will not assign the lease, the price is not the problem. The transfer path is. I read remaining term, options, assignment language, and personal guarantees before I treat the file as listable.
On restaurants and bars, the liquor license is often the second clock. Series 12 restaurant licenses and Series 6 or 7 bar licenses transfer through the Arizona Department of Liquor Licenses and Control. The buyer applies. You cooperate. Timing is separate from the business close. I am a broker, not a liquor attorney. I still treat the license as part of the worksheet, not a footnote.
Transferability is the rest of the story: staff who stay, customers who are not buying you personally, contracts that assign, and systems a new owner can run. If the business only works with you in the room, the multiple compresses. That is risk, not an insult.
What you get
You get a conversation grounded in your numbers. I look at the returns, rebuild SDE, and tell you what a buyer, a landlord, and a liquor transfer can support. No automated PDF. No teaser range from a form.
The form that starts that conversation is Value My Business. There is no obligation to list. If you would rather call, use the number below.
Across Arizona
I work across Arizona. Lease conversations, seasonal cash flow, and city licensing change between a Scottsdale room and a Prescott service shop. I price the file in the market it lives in.
I specialize in restaurants, bars, service businesses, and contractors. Other small-to-mid-market Arizona files come in when they fit. The office is 4745 N 7th St, Phoenix, AZ 85014. Hours are 9:00 AM to 8:00 PM every day including weekends.
Related reading: How to choose an Arizona business broker, Sell my restaurant in Arizona, Sell my service business in Arizona, SBA financing in an Arizona business sale, and franchise resale in Arizona.
Frequently Asked Questions
How do you value an Arizona business?
I start with multi-year tax returns and P&Ls. I rebuild Seller's Discretionary Earnings and the add-backs a buyer will accept. The multiple follows the category, the risk, and how transferable the business is. Lease and liquor enter the worksheet when they apply.
What is SDE?
Seller's Discretionary Earnings is the cash flow a full-time owner-operator would take after we normalize owner pay and discretionary spending. It is the language buyers use when they price an owner-operated Arizona business.
Is a free valuation a real appraisal?
No. It is a broker opinion grounded in your numbers. It is not a bank appraisal and it is not an automatic multiple from a website. There is no obligation to list.
Do restaurants and bars value differently?
The SDE core is the same. On restaurants and bars, the lease and the liquor license often drive the risk and the timing more than they do on a service company.
What financials do you need?
Typically three years of tax returns and P&Ls. If the books are messy, I will ask for more so we can document the add-backs.
Who is Eddy?
I am Eddy Roche, Associate Broker BR579487000 at HUB AZ Brokers and Sunbelt Business Brokers. I work across Arizona on restaurants, bars, service businesses, and contractors.
Start with the worksheet
Send the basics on the form. I review the file and call you. Across Arizona. No obligation to list.