How to Maximize Valuation Before Selling Your Company
Selling your business is often the biggest financial event of your life. How you prepare for the sale can determine whether you leave money on the table or walk away with a premium valuation.
At Tetelestai Capital, we work closely with lower middle market companies to help them grow strategically and exit intelligently. A common question we hear is: “How do I increase the value of my business before going to market?”
Here are six powerful ways to maximize your company’s valuation before a sale:
1. Increase Recurring Revenue
Buyers love predictability. Recurring revenue—through subscriptions, long-term contracts, or repeatable services—commands a premium multiple. Even if you are not a SaaS company, identify where recurring value exists and formalize it.
Action Tip:
Convert informal relationships into renewable contracts. Shift away from project-based work when possible.
2. Improve Margins and EBITDA
Valuation multiples in the lower middle market are typically applied to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Improving margins now directly impacts your take-home later.
Key Levers:
Trim unnecessary expenses
Renegotiate vendor contracts
Streamline operations and inventory
Eliminate unprofitable products & services
3. Build a Management Team That Runs Without You
If you are the business, your company’s value drops. Buyers want a business that can thrive without the founder involved day-to-day.
Action Tip:
Develop a strong second-tier leadership team. Empower them to run the business and demonstrate that autonomy in your financials and operations.
4. Clean Up Financials and Run Accrual Accounting
Sloppy books kill deals. Inaccurate or unclear financials reduce buyer confidence and can drag out due diligence or reduce offers. Shift to accrual-based accounting if you have not already as it paints a more accurate financial picture.
Action Tip:
Engage a fractional CFO to prepare audited or reviewed financial statements and ensure key metrics are tracked consistently.
5. De-Risk Your Revenue
Customer concentration, single points of failure, or overly cyclical revenue streams raise red flags. Buyers discount risk rapidly.
Mitigation Strategies:
Diversify your customer base
Document processes so operations don’t depend on key employees
Secure IP and compliance if applicable
6. Tell a Strategic Growth Story
A good financial history is essential, but buyers also pay for future potential. Craft a clear, data-backed narrative that shows why your company is poised for growth under new ownership.
Action Tip:
Build a simple but compelling growth plan with realistic assumptions, expansion opportunities, and quantifiable ROI.
Final Thoughts
Maximizing valuation is not about financial engineering. It is about creating a fundamentally stronger business. Whether you plan to exit in 12 months or 3 years, preparation should start now.
Our firm partners with founders to position their businesses for premium outcomes. If you are considering a sale or want to understand your company’s current value, we should talk.
Want a professional exit readiness assessment?
Contact our team to schedule a confidential strategy session.