In this week's issue...
Buying a business? Price in the vendor spend
The cheapest growth capital might already be sitting in the P&L
My last post was about knowing your number even if you're not selling. This week flips it to the buy side
Last week I was at SMBootcamp LIVE in Denver with Sam Rosati, Adam Markley, Matt Beckham, and Drew Eckman... a room full of people learning how to find, finance, and close a small business acquisition
Quick definitions:
EBITDA: earnings before interest, taxes, depreciation, and amortization (a read on operating profit)
SDE (Seller's Discretionary Earnings): EBITDA plus one owner's pay and perks (the usual yardstick for smaller deals)
One thing I learned there is add-backs: one-time or owner-specific costs you add back to get the real earnings picture. They make you sharper on what a fair purchase price looks like
Here's the #shamelessPlug. In diligence, buyers look at the Quality of Earnings report, ops improvements, and growth. Add one more line... vendor spend
If the current owner hasn't renegotiated contracts in years, there can be tens or hundreds of thousands in cash and profit to unlock in the first six months. That's fuel for growth you don't have to borrow 📈
Looking at a deal? Grab 15 minutes and I'll give you an honest read on the vendor side.
Events 🗓️ MANJ Nov 12 + a cost reduction panel
MANJ Fall Event, Nov 12
A reminder that the Manufacturing Alliance New Jersey (MANJ) Fall Event is coming up. You'll hear from guest presenters, meet advocacy groups, and network with owners facing the same cost and workforce pressure
WHEN: Thursday, November 12, 2026 · 5:30–7:30 PM
WHERE: Venture X Parsippany · 8 Campus Drive, Parsippany, NJ 07054
ERC is proud to be a Sponsor 😊
Coming up: a panel on cost reduction
Next week I'm on a panel about cost reduction with one of my networking groups. I'll share key takeaways here afterward... and if you want details in the meantime, just reply to this email!
This week on the podcast... Sai Dhanak from Deduction
There's not enough CPAs... so what happens to your tax prep?
I sat down with Sai Dhanak, co-founder and CEO of Deduction, to talk about how AI is changing tax services for small businesses and solopreneurs
A few takeaways:
The CPA shortage is real. Fewer accountants are entering the field, so getting fast, proactive service from a firm is getting harder
AI can get close... but not all the way. Being a tax firm is more than putting numbers into boxes, and there's a lot under the surface AI can't handle alone yet
Trust still needs a human. Deduction's process is built to feel like working with a real accountant, with human touch points where they matter
Responsiveness is the product. Sai's pitch starts with being responsive and proactive, which is where many owners feel let down by their current firm
More of the series: ERC Podcast: Grow Smart, Run Lean
Onwards and Upwards,
Joe Lapscher
Partner, ERC
Why you're getting this:
You're receiving this because we've met at a networking event, worked together, or signed up for my newsletter online, which I really appreciate.
I send 2-4 emails a month with practical thoughts on expense reduction, plus the occasional heads-up on something like the MANJ event. I respect your time and inbox.
