Business Valuation Glossary

Project Costs

Definition

The sum total of all funds required to complete a business purchase transaction.

What It Means

Typical project costs include:

  • Business purchase price.
  • Working capital.
  • Closing costs.
  • Professional fees such as those charged by the CPA and attorney.
  • Lender fees.
  • Business appraisal fees.
  • Business license fees.

You need to set a budget for the business purchase which includes all expenses. In asset business purchases, the seller typically retains cash and short-term investment assets. The buyer then will need to inject additional funds into the business to ensure that it has sufficient .