The first question most strategic buyers ask isn’t, “What’s your price?” It’s, “What risk am I inheriting?”
Buyers look past revenue and into concentration. Past growth and into durability. Past projections and into what could realistically go wrong.
Owners don’t always ask those questions of themselves early enough.
Internal blind spots tend to feel normal. Customer concentration feels manageable. Key-person dependency feels temporary. Informal processes feel efficient. Until someone across the table reframes them as risk.
Due diligence isn’t meant to be an obstacle. At its best, it’s a mirror.
When you look at your business through a buyer’s lens before a deal is on the table, you gain time to address what would otherwise become leverage against you.
If you evaluated your company the way a buyer would tomorrow, what risks would show up first?
In this episode of the EO Atlanta Taking Flight Podcast, @tourville_sarah sits down with @davidherncpa CEO of Sofer Advisors, to dive into the art and science of understanding what makes a business truly valuable.
David shares how his Atlanta-based, family-run firm partners with companies of all sizes. He discusses the biggest factors that drive business value, including the importance of strong financials, reducing founder dependency, and building recurring revenue streams.
Listeners will also hear David’s insights on why removing yourself from your business can increase its value, how to reduce “key person risk,” and why Sofer Advisors chose a name that reflects their mission, not a single individual.
Some of the hardest disputes I see don’t come from decline. They come from growth.
Early in the year, momentum builds. The business starts moving faster. And that’s often when misalignment shows up between partners, leaders, or stakeholders who were aligned when things were simpler.
Growth forces questions that didn’t matter before. How much risk to take. How value is being created. Who’s carrying it. And what the business is actually worth if paths start to diverge.
When those questions go unanswered, people tend to fill in the gaps with assumptions. That’s when emotion creeps in and conversations stall.
This is where an objective view matters most. Not to “pick a side,” but to replace assumptions with shared facts. When everyone is working from the same numbers, tension becomes easier to talk about and decisions become easier to make.
Conflict during growth isn’t a failure. It’s often a sign the business has outgrown its old framework.
When tension emerges during growth, how do you decide whether to push forward or step back and reset alignment?
Every spring, people clean out what they can see.
In businesses, the bigger mess is usually the assumptions no one revisits.
I see this a lot with owners running healthy companies. The numbers are fine. The team is solid. Nothing feels urgent. So certain beliefs get carried forward year after year without much scrutiny.
Assumptions about what the business is worth.
Assumptions about how aligned partners really are.
Assumptions about when an exit or transition will “make sense.”
Most of the time, those assumptions weren’t wrong when they were formed. They’re just outdated.
Markets shift. Risk profiles change. Personal priorities evolve. What was true a few years ago can quietly stop being true long before anyone notices. And when that happens, those assumptions start shaping decisions in the background.
Spring is a good reminder that clarity doesn’t always come from adding something new. Sometimes it comes from clearing out what no longer fits.
Which assumptions are still serving your business and which ones have just been left untouched?
One thing February exposes every year is misalignment.
Not bad valuations. Not missing numbers.
But situations where the valuation says one thing, the financial statements say another, and the tax or ERISA reporting tells a slightly different story.
Individually, each piece might look reasonable. Together, they raise questions auditors and regulators are trained to notice.
Most valuation issues don’t come from being aggressive. They come from different advisors solving different problems without realizing how closely those answers need to line up.
Where do you see misalignment show up most often—tax, financial reporting, or compliance reviews?
This time of year, the most common sentence I hear is: ‘We thought that was good enough.’
Enough documentation.
Enough support.
Enough to get through review.
What usually follows is an auditor or regulator explaining why it isn’t.
A K-1 that works for tax reporting.
An appraisal that covers the property, but not the entity.
An internal model that made sense internally, but doesn’t meet an external standard.
None of those are careless shortcuts. They’re just tools built for a different purpose.
February is when that gap shows up. When valuations move from internal comfort to external scrutiny. ERISA reviews, tax-driven valuations, and audit standards all draw a harder line between “reasonable” and “defensible.”
If you’ve ever heard “we thought that was good enough,” you already know how expensive that realization can become once the clock is ticking.
Do not let it be said that david didn’t beat Goliath. Bc I totally intercepted that guys pass 🙂. We won our 40+ tourney t the Florida Classic this past weekend.
Every January, people talk about tax strategy.
But Opportunity Zones rarely make the list, even though 2026 is when many OZ projects finally hit the stage where valuation really matters.
What’s shifting is awareness:
More QOF managers are discovering that the IRS expects defensible fair market value through the entire lifecycle — contributions, restructurings, annual reporting, and especially exit.
A real estate appraisal won’t cover it.
A K-1 won’t cover it.
“Back-of-the-napkin FMV” won’t cover it.
If you’re counting on the 10-year step-up, the numbers at exit must withstand scrutiny.
And January is when smart investors start preparing for the compliance work, not scrambling right before a filing.
Valuation is serious work — but that doesn’t mean we always have to be. So we asked kids a few big questions: what company they’d buy, who should run a merger (robot or teddy bear), and what Sofer Advisors actually does. The answers were honest, unexpected, and occasionally… “computer.”
Inspired by the idea that kids say the darndest things, this was our lighthearted take on a complex business, and we had fun making it.
Curious what you think. Is this a fun change of pace, or should we leave the commentary to the robots?
If this made you smile, you can also find it on our YouTube page. And if you enjoy seeing a different side of valuation, feel free to follow us there.
/@SoferAdvisors
#KidsSayTheDarndestThings #BusinessValuation #TheValGuy #CompanyCulture
It’s a new year, so here’s a reminder I guarantee will save someone pain later:
A K-1 is a tax document.
Not a valuation.
Not fair market value.
Not acceptable for ERISA, auditors, or the IRS when real FMV is required.
I’ve already seen several plans head into 2026 assuming their K-1s could support asset values in retirement accounts.
They can’t, and auditors have been getting more direct about it.
If your retirement plan holds anything illiquid, you’ll need independent valuation support. It doesn’t matter if it’s a small position or a passive LP interest.
January is a great month to fix this proactively, not reactively.
Do you know which of your plan’s assets look easy but actually require a valuation?
