What buyers actually pay up for

First, the thing this article will not do. It will not tell you what your business is worth, it will not give you a multiple, and it will not give you a range. Nothing on this site does.

That is not coyness. What a business sells for depends on who is buying it, why they are buying it, what else is on their desk that quarter and how the process is run, and no article can know any of those. A number published without them is worth nothing to you and does real damage to whoever takes it into a meeting. What we can tell you, because we spend our working life reading these businesses from the buyer's side, is what actually moves a buyer once they are in the room.

It is rarely what owners spend the final year polishing.

1. Whether they are buying a business or buying your job

This is the first thing tested and the one that most often decides whether the process turns into a long earn-out or into nothing. If the business does not run without you, the buyer is not acquiring an asset. They are acquiring a position, and they will price the risk of you leaving it.

The specific version of this that gets missed: it is not about whether you work in the business. It is about who the customers ring. If they ring you, the relationship is with you, and it does not transfer at settlement just because the shares did.

Fixing it is eighteen months of deliberately handing over relationships and letting somebody else make decisions badly for a while. It cannot be done in the quarter before a sale, and buyers can tell.

2. How long the first document request takes

A buyer asks for three years of financials, a debtor ledger and the main contracts. Whether that takes a day or three weeks tells them more about how the business is run than anything in the documents does, and they form the view before opening a single file.

This one costs nothing to fix and almost nobody does it in advance. A business that answers in a day has changed the temperature of the entire process, because every later request is now assumed to be easy too.

3. Earnings that survive the paperwork

Every add-back needs evidence behind it. The line most often rejected is not the aggressive one, it is the one where the owner says a cost will not repeat and cannot show why not.

Owners routinely damage themselves here in the opposite direction to the one they expect. A genuinely personal cost running through the business is not a weakness once it is identified and evidenced. It is an adjustment, and it raises the earnings the conversation is built on. Quietly removing it in the year before a sale is worse, because now the accounts show a cost base that changed for no stated reason.

4. Which way the margin has been moving

Three years of gross margin by month is the single most revealing table in a diligence pack, and it is the one owners almost never look at themselves.

A margin falling while revenue rises is the pattern that most often ends a process, because it says the growth was bought rather than won. It is also entirely invisible in an annual profit and loss, which is why the business is often the last to know.

5. Concentration, explained rather than hidden

Concentration does not stop a deal on its own. Plenty of good businesses have a customer at thirty per cent of revenue. What stops a deal is an owner who has not thought about it, because the buyer then has to assume the worst.

The version that lands well is: here is the customer, here is how long they have been with us, here is what is contracted, here is who else in the business holds the relationship, and here is what we have been doing about it for two years. That answer costs nothing and it converts a red flag into a known quantity.

The same goes for a table of your top ten customers by revenue for each of the last three years, side by side. If the list barely changes, that page does more for you than any amount of narrative. If it changes a lot, you want to be the one who noticed.

6. What is written down

A lease with eleven months left on it is not premises, it is a negotiation you are about to have with somebody who now knows you are selling. Verbal supply arrangements, expired employment contracts and undocumented licences all behave the same way: they turn into conditions, and conditions turn into time.

Time is where deals die. Not on price.

What buyers do not pay up for

A new website. A rebrand. A record year that nobody can explain. Forecasts, generally, and enthusiastically prepared ones especially, because a buyer is paying for something they can inspect and a forecast is the one document in the pack you wrote yourself about a period that has not happened.

The pattern across all six of the things that do matter is that they are about reducing the buyer's uncertainty rather than improving the business. Four of the six cost nothing except time and attention, and the two that cost something are the two you have to start years out.

Where to start

Answer the ten questions honestly and see which of these you would fail. It is free, nothing is gated, and the version a buyer's adviser runs will not be as gentle.