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DIEPPE · E-2 FIELD GUIDE

Does the platform’s projected sales figure equal available business capital?

Sources checked:

THE DIRECT ANSWER

No. Forecast revenue is different from funds invested and cash available for operations.

Separate spending from expected receipts

Identify inventory, service charges, returns and household expenses. Keep substantiality and nonmarginality analysis tied to supported facts rather than a platform’s promotional estimate.

If part of the price is borrowed, the structure matters: debt secured against the business assets is treated differently from borrowing for which the investor is personally liable, and the distinction affects whether the funds count as at risk. Due diligence, legal work on both sides of the border, escrow costs, state and municipal licensing for arboriculture and pesticide application, insurance, and the working capital the business needs after closing. Plans understate this in predictable ways: leasehold improvements, licences and permits, insurance, deposits, initial inventory, the first months of payroll before revenue arrives, and professional fees for incorporation and closing. For a share purchase the relevant cost is the price for the business as a whole, established by the seller's financial statements, the equipment schedule and the negotiated agreement, plus any working capital the buyer must add. Match deposits, escrow releases, purchase payments, lease obligations, and equipment orders to source records; keep professional charges and recoverable balances in separate categories. A rights payment gets quoted, invoiced and paid, so it feels like the investment, while the working capital that keeps the business alive is estimated, unbilled and correspondingly easy to leave out of the total.