You want to sell your company. Maybe in two years. Maybe five. You have spent decades building it. But here is what happens when a PE firm evaluates your business: they see the risk immediately.
What PE Firms Actually Evaluate
They look at EBITDA, of course. They look at revenue growth, customer concentration, and market position. But the single biggest value driver or value killer is this: does the business run without the owner?
If the answer is no, your multiple drops. Your valuation drops. The deal you have been working toward for 20 years disappoints.
The Three Tests
Test one: Can your leadership team make operating decisions without you for 30 days? Test two: Do you have documented processes, or does institutional knowledge live in people’s heads? Test three: Is your customer base diversified, or are you dependent on a handful of relationships that you personally manage?
If you failed any of those tests, you have work to do before you go to market.
How to Fix It
Install an operating system. Not an ERP. A management operating system that defines how decisions get made, how performance is measured, and how execution happens without you in the room.
I have been on both sides of the PE table. I have run PE-backed companies and sold them. I have closed over 100 acquisitions across five continents. The companies that command premium multiples are the ones with a system that runs independently of any single person.
The Timeline
Plan 12 to 24 months before going to market. That gives you time to install the structure, prove it works, and show 2 to 3 quarters of results with you stepping back. Buyers pay for systems, not founders.
Book a strategy call at the8020institute.com to find the right program for your company.