Sellers usually hear the sell-side QoE pitch as: pay several thousand dollars to have someone go looking for problems with your own business. Put that way, nobody would do it.
The framing that actually matters is different. Something is going to test your numbers before this deal closes. The only question is whether that happens on your calendar or on the buyer's.
The failure mode is rarely that a deal dies outright. It is that the deal repriced.
A business goes to market at $1.2 million of SDE. The buyer's provider works through it and lands at $1.02 million, mostly on add-backs that were reasonable in substance but presented in a way that could not be supported: a market adjustment shown as a single net line, personal expenses with no invoices behind them, a one-time cost that appeared in all three years.
At a 3.5x multiple, that is $630,000 off the ask. And the damage is worse than the arithmetic, because now the buyer is negotiating from a position where your number turned out to be wrong. Every subsequent request gets easier for them to make.
The same adjustments, found and either fixed or explained before going to market, cost nothing at all.
This is changing quickly, and the new SBA rule is why.
Under SOP 50 10 8.1 the buyer's Quality of Earnings report on any deal over $3 million is commissioned by the lender and prepared for the lender. Proof of cash is expected. That means every seller in that range is going to have their deposits tied to their revenue by someone whose duty runs to the bank, not to the deal closing.
Brokers who have been through one deal that fell apart at that stage are now doing the work upfront. We expect sell-side QoE to become standard on the upper half of the market within a year, for a simple reason: a broker who can hand a buyer a supported number closes faster and at a better price than one who cannot.
Not always. The honest test is whether any of these are true:
If none of those apply, and you have accrual books, clean support and modest adjustments, you probably do not need one. We will say so.
If a full engagement is more than the deal warrants, there is a narrower version that captures most of the value: proof of cash plus add-back support review.
Tie the deposits to the revenue, and go through every adjustment in the recast asking one question, what document supports this. Those two procedures account for the large majority of the surprises we find on the buy side. It is a fraction of the cost of a full report and it removes most of the repricing risk.
It does not make your number bigger. Occasionally an engagement finds understated earnings, usually where an owner has been conservative about what they add back, and that is a good day. But that is not the argument.
It also does not bind the buyer. Their provider will do their own work, and under the new rule the lender's provider will too. What a sell-side report does is make sure that when they do, they arrive at a number close to yours, with the reasoning already documented, rather than discovering something you did not know about your own business.
That is the whole product: no surprises, on your timeline, at your cost, instead of theirs.