Our sector average multiple is five times EBITDA, but some competitors are trading at eight times. How do we systematically identify and fix the operational inefficiencies holding our specific multiple down before we go to market?

Question

Tyler Smith · Accepted Answer

To move your business from a standard five times multiple to a premium eight times tier, you must eliminate the systemic risks that buyers use to justify a discount. Buyers do not pay premiums for historical performance; they pay for the predictability and durability of future cash flows.

To find and fix what is holding your multiple down, schedule a dedicated Thinking Time session. Frame your inquiry with this specific question: How might we build operational redundancy into our key leadership seats so that a buyer sees our business as a self-sustaining machine rather than an owner-dependent risk?

Start by auditing your EOS Accountability Chart. Every seat must be filled by someone who fully GWCs (Gets, Wants, and has the Capacity for) the role. If you, the owner, are still sitting in key operational or sales seats, you are paying a massive dumb tax on your valuation. Buyers will discount your multiple to account for the risk of your departure.

Next, look at your operational data. A premium multiple is awarded to companies with clean, repeatable, technology-enabled processes. Use your weekly Level 10 Meeting to identify, discuss, and solve the bottlenecks in your operations. When you can show a buyer a documented operating system supported by custom automated workflows, you transform your business from a risky local operation into a highly scalable platform. This operational discipline is what shifts your multiple from a baseline average to a premium valuation.