Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

The Question Most Owners Can’t Answer Before Selling

16 Oct 2026 · 1 min

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In this brief segment, Bob Gauvreau explains that the first question a potential buyer will ask a business owner who is preparing to sell is about the company's EBITDA (earnings before interest, taxes, depreciation, and amortization). He points out that many owners can readily quote revenue figures but lack a clear, normalized EBITDA number, which is the true foundation of a business’s valuation. Gauvreau stresses that understanding and being able to articulate EBITDA is essential for owners who want to position their company effectively for sale.

Chapters

If an owner sold tomorrow, what's the first question a buyer would ask that most couldn't answer? Shockingly, if someone were to be selling their business and a potential purchaser asks a question, what would that be that really they're unsure of? And this is going to sound strange because you think everyone should understand this, but they wouldn't know how much money the company makes. What's the EBITDA? What's the foundation of the value? Nobody would have Any idea. Now, again, the most dialed-in business owners will have a really good understanding of what that number is. But, you know, so many people who are selling their business, you ask them their revenue and they'll give it to you. They'll say, yeah, we know what the revenue is, but nobody really knows what the earnings are, the normalized earnings, the EBITDA number, which really drives the value of the business. So if you don't, if you don't understand that, you know, that's where you really need to be starting.