I ask business owners a question that usually changes the conversation: If you were buying your own company today, what would worry you?
An owner sees history—the customers won, the stores opened, the problems survived. A buyer sees a stream of future cash flows and immediately asks what could interrupt them:
- How dependent is the business on the owner?
- How concentrated are the customers?
- How sustainable are the margins?
- How repeatable is growth?
- How scalable are the systems?
$5 million of EBITDA isn’t always worth the same amount
Two companies generating $50 million in revenue and $5 million in EBITDA can have vastly different valuations. The business with recurring revenue, strong management depth, and operational independence from the founder commands a much higher multiple than one with customer concentration and owner dependency.
The useful question isn’t “What’s my business worth?”
It is “What is preventing my business from being worth more?”
The 20% Question
Assume someone offered to buy your company today, but offered to pay 20% more if you could fix three things over the next 24 months. What would those three things be?
- Customer concentration?
- EBITDA margin?
- Management depth / Owner dependency?
- Franchisee economics?
- Operational complexity?
Identifying those three things highlights your top strategic priorities, because a 20% increase in enterprise value can be far more valuable than a 20% increase in top-line revenue.
Through SHG PerformANT AI™, we help franchise systems and manufacturers continuously view their operation through an investor lens to build lasting enterprise value years before any transaction takes place.