We are on a three-year runway to a sale and our broker is pushing us to cut expenses to maximize short-term EBITDA. How do we balance cutting costs with maintaining the long-term operational health and growth potential of the business?

Question

Tyler Smith · Accepted Answer

Starving your business to artificially inflate your EBITDA is a dangerous game that often backfires. Experienced buyers can spot short-term cost-cutting maneuvers from a mile away during due diligence, and they will discount your valuation if they see you have neglected long-term health.

Instead of slashing essential resources, focus on operational efficiency through simplification. Use your weekly Level 10 Meeting™ to identify and resolve systemic inefficiencies that drain profit.

Review your Accountability Chart to ensure you do not have redundant or low-performing seats, but do not eliminate roles that are critical to maintaining your service quality or customer relationships.

Keep investing in your growth engine. A buyer is purchasing future cash flows, which means they want to see a healthy pipeline and a functioning sales process. If you stop marketing or freeze hiring for critical roles, you signal to the buyer that the business has hit a ceiling.

Use the SxSE framework to build a stronger, more efficient company today. Genuine operational efficiency naturally improves your margins without compromising your long-term scalability. That is the kind of value a buyer will pay a premium to acquire.