The Glossary

Every term from Acquisition 101, and what "AI consulting" actually means, all in one place - so the homepage stays focused and this stays thorough.

💵 Acquisition Terms
Riverside Wash Co.
A Worked Example: Laundromat · Estimated figures, for illustration only
Revenue$280,000
Supplies (detergent, bags)($20,000)
Gross Profit$260,000
Rent($60,000)
Utilities (water, gas, electric)($40,000)
Machine Maintenance($20,000)
Payroll (2 part-time attendants + $40,000 owner draw)($100,000)
Insurance($10,000)
Net Income$30,000
+ Owner's Salary (add-back)$40,000
SDE$70,000
Laundromats trade at a fairly high multiple for a small business, often around 3x, because the lease, the machines, and the routine don't depend much on one specific person. At 3x, a bid here would land around $210,000.
Fernwood Craft Beverage Co.
A Worked Example: Small Manufacturer, Broker-Style Statement · Estimated figures
Revenue$740,000
Cost of Goods Sold($220,000)
Gross Profit$520,000 (70%)
Selling & Advertising($25,000)
Rent & General($115,000)
Shipping & Distribution($16,000)
Bank Charges($15,000)
Payroll (excludes owner)($160,000)
Supplemental Owner's Salary($52,000)
Net Income$137,000
+ Owner's Salary (add-back)1$52,000
+ Depreciation (add-back)2$30,000
SDE$219,000
1 Removed: this was the owner's personal compensation, not a true cost of running the business.
2 Non-cash expense: depreciation doesn't leave the bank account, so it gets added back for valuation purposes.
This is closer to how a real broker-prepared statement looks: itemized, with footnotes explaining every adjustment, so a buyer can trace exactly how revenue became SDE. At a multiple of 2.5x, a bid here would land around $547,500.
💵
Revenue
All the money coming in before anything is subtracted, the headline number on a listing, and the one that matters least.
🧑‍💼
Salary
What the current owner pays themselves. It gets added back when calculating SDE, since a new owner who runs the business keeps that pay instead of it being a cost.
🤝
Bid
The price a buyer offers, usually built as a multiple of SDE or EBITDA. Not the asking price, what's actually put on the table.
📊
SDE
Seller's Discretionary Earnings - what a business actually earns once owner-specific spending is stripped out.
📈
EBITDA
Earnings before interest, tax, depreciation, amortization. Used more on larger deals than SDE.
✖️
Multiple
What SDE/EBITDA gets multiplied by to set price - the "years of earnings" you're paying for.
↩️
Add-back
A personal or one-time expense removed to show real earning power.
🤝
Goodwill
The gap between the price paid and the hard value of assets - what you're paying for reputation, customer relationships, and brand.
💼
Working capital
Cash needed to keep the business running day-to-day - inventory, payables, receivables. Usually negotiated separately from the sale price.
🏦
Seller financing
The seller loans you part of the purchase price, paid back over time - reduces how much cash or bank financing you need upfront.
🎯
Earnout
Part of the price paid later, contingent on the business hitting agreed performance targets after you take over.
🚫
Non-compete
A clause stopping the seller from starting a competing business nearby for a set number of years.
🔍
Due diligence
The investigation phase before closing - verifying the financials, contracts, and legal standing actually match what's claimed.
📝
LOI
Letter of Intent - a non-binding document outlining proposed price and terms before full due diligence begins.
🏭
Asset sale
The buyer purchases selected assets and assumes only specified liabilities. Contracts, licences, employees and tax treatment still need deal-specific review.
🏢
Share or stock sale
The buyer purchases the company entity itself, so its history, contracts, assets and liabilities generally remain inside that entity.
🛟
Debt-service coverage ratio
Cash available for debt service divided by required debt payments. Above 1.0x means the scenario covers debt; many lenders want additional cushion, often tested around 1.20x to 1.25x or higher.
🤖 What We Actually Build
🗂️
A CRM
A real web application, built and hosted on your own AWS account, so you control the data end to end. No SaaS subscription - a retainer to build and maintain it, keeping hosting cost minimal as you scale.
✍️
Content & copy
Not a magic button - us in a meeting with you, feeding your product brief and voice into Claude or ChatGPT, refining the prompt structure together until it sounds like you.
🎬
Ads & creative
Concretely: product images generated with Google's Nano Banana Pro, then animated into short video with Kling 2.5 - real, current tools, not a vague "AI" wrapper.
⚙️
Efficiency consulting
Auditing where your team spends time on repeatable work, then automating the parts that don't need a human - anything from lead follow-up to internal reporting.