The Exit That Never Comes: Why Your Business Isn't Worth What You Think

Most mid-market business owners are shocked when they learn what their company is actually worth to potential buyers. The gap between owner expectations and market reality often reaches 50-75%.

The Valuation Reality:

• Owner expectations: 8-12x EBITDA

• Market reality: 3-6x EBITDA for most mid-market companies

• Limited buyer pool for $50-150M revenue businesses

• Due diligence reveals problems that reduce offers

What Kills Business Value:

• Customer concentration (top 3 customers = 40%+ of revenue)

• Owner dependence (business can't run without founder)

• Inconsistent growth (revenue flat or declining)

• Poor systems and processes

• Limited management depth

Why Traditional Exit Planning Doesn't Work:

• Financial cleanup doesn't address fundamental issues

• Legal structuring can't fix operational problems

• Tax planning doesn't increase what buyers will pay

• Waiting for "the right time" often means missing opportunities

The Real Solution

What We Find Works: Growing companies command premium valuations because buyers pay for future potential, not historical performance.

How Sales Growth Maximizes Business Value:

• Consistent growth proves the business model works

• Growing companies attract multiple buyers (bidding wars)

• Growth demonstrates that success doesn't depend on the owner

• Scale improvements make the business more attractive

The Multiple Effect: A business growing 25% annually typically sells for 2-3x the multiple of one growing 5% annually.

Real Example: A $95M manufacturing company received offers of 4x EBITDA when flat revenue made buyers nervous. After implementing growth strategies that delivered 35% growth over two years, they sold for 9x EBITDA to a strategic buyer who saw continued growth potential.

The Bottom Line: You can't exit-plan your way to a great sale, but you can grow your way to the exit you want.