There is a hard truth most successful owners resist.
The more your business depends on you, the less a buyer will pay for it.
You may be the reason the company succeeded. If you are the reason it survives, you are also the reason it is discounted.
Buyers pay multiples on earnings that are transferable.
If earnings depend on:
- Your relationships
- Your approvals
- Your expertise
- Your daily problem solving
They are fragile.
Fragile earnings do not command premium multiples.
A company generating one million dollars in EBITDA might sell for:
3.0x if the owner is indispensable
4.0x if leadership is stable
5.0x or more if systems are institutionalized
That is a multi-million-dollar swing without growing revenue.
Here is a simple exercise.
Write down everything that would break if you disappeared for thirty days.
Every item on that list is suppressing your multiple.
The good news is that all of it is fixable.
If you would like to evaluate where your earnings are currently being discounted, and what would raise your multiple, I am happy to walk through it confidentially.
Higher multiples are engineered, not negotiated.