The largest number you control before a sale

Two companies. Same revenue, same profit, same customers, same trucks, same crews. One sells for $17.4 million and the other for $12.9 million.

The difference is whether the business runs on documented systems and a management team, or on the person who built it. Closed transaction data from FISART, covering thirteen service industries and enterprise values from one million to fifty million dollars, puts that gap at one to two turns of EBITDA. On a company earning three million a year, that is four and a half million dollars.

This episode covers what a buyer is paying for, how they work it out during due diligence without ever asking directly, and what closes the gap. It also covers why the owners with the most to gain here are usually the best operators, and why an owner thinking about this three years out is exactly on time.