09/03/2026
You've been taking a $40k salary for 10 years while your business makes $500k. You think that's a hidden asset. Your buyer thinks it's a red flag.
Here's the reality: deferring your own comp doesn't destroy value, but it hides it. And when it comes time to sell, you can't just tell a lender "the business runs on free labor." They won't buy it. Literally.
The fix is honest recast earnings. Add back your deferred comp. Normalize it to a fair market wage (usually $60-80k for main street businesses). Document it so tightly that your buyer and their lender can trust it.
Done right, this usually reveals value the P&L was hiding all along. Done as wishful thinking, it collapses in due diligence.
The whole game is the credible, sourced, reconciled number.