Personal cell and Personal vehicle/gas as addbacks

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August 21, 2023

by a searcher in Illinois, USA

Hello there

I wonder if there is rule of thumb to use some % of personal cell and vehicle/gas as add backs ? Cellphone is easy but gas charges are very difficult to verify and required some heavy lifting.

What is common with regards these misc expenses when valuing the business ?

Thanks in advance.


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Reply by a searcher
from Queen's University in Toronto, ON, Canada
This question will greatly depend on the type of business and use. If the business is mostly online and vehicle/gas has little value to the business, then it is fair to give them as a full add back or at least a significant amount. If on the other hand, the business is in construction and the seller has a pickup truck, there is probably good reason to believe he is leveraging that for business needs. There is no exact science here. Try to make an educated guess on use and speak to the seller and potentially other employees (if the seller is ok with you to do so) in order to assess. But this is a negotiation term that you'll need to discuss with the seller and comes to an arrangement on.
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