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  • Writer's pictureDario Priolo

The Importance of Adjusted EBITDA for Training Company Owners When Selling Your Training Business

As a training business owner preparing for eventual exit, your top goal is likely achieving financial freedom. To realize your full company value at sale, adjusted EBITDA is a critical metric to understand and track.

What Buyers Care About

Potential buyers rely heavily on your adjusted EBITDA when valuing your training firm and structuring offers. EBITDA shows earnings power by removing variables related to financing, taxes, etc. It spotlights the company’s core cash flow strength.

The Role of Adjustments

However, as an owner, business decisions you make may artificially deflate or inflate EBITDA. For example:

  • Paying yourself above/below market salary

  • Significant owner perks lowering pre-tax income

  • Accounting choices influencing earnings

To reflect true earnings power, your EBITDA must be properly “adjusted” up or down before going to market.

Implications of Inaccurate EBITDA

Failing to accurately calculate adjusted EBITDA can severely impact your training company’s sale:

  • Understated EBITDA leads to lower offers

  • Overstated EBITDA undermines credibility

  • Inability to agree due to gaps erodes negotiation leverage

Many owners discover this too late, resulting in reduced exit value.

Get Ahead of the Process

Work with financial specialists starting 5+ years pre-exit to validate your training firm’s adjusted EBITDA over several years of financials. Accurate metrics will prove invaluable when serious buyers come knocking.

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