Which owner and one-time expenses can support an add-back?
The label matters less than whether the cost will truly disappear.
Many founder-led companies incur expenses that a new owner may not continue. Those items can be relevant to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), but only when the underlying economics are clear.
Common examples include personal expenses recorded through the company, compensation paid to family members who do not perform a continuing role, the portion of owner compensation above a market replacement cost, and unusual professional fees tied to a discrete event. A documented loss from a closed location or a resolved legal matter may also warrant analysis.
The standard should be more demanding than “we do not expect this again.” Ask three questions. Did the expense actually occur in the period? Is it outside the company’s ordinary operations? Will the buyer avoid the cost without sacrificing the revenue or capability associated with it?
Use invoices, payroll records, agreements, and general-ledger detail to support the answer. Apply the treatment consistently across periods. If an owner is paid below market, or performs work that will require a new hire, normalization may reduce EBITDA rather than increase it. Credibility improves when the bridge includes both favorable and unfavorable adjustments.
Do not combine unrelated items under a broad “one-time” line. Buyers will test each adjustment separately, and a vague total invites a broader challenge.
The purpose is not to manufacture earnings. It is to present a documented view of the cost structure a buyer will inherit.