Preparing to Sell Your Business? 8 Key Drivers to Maximizing Your Company’s Value

Selling a business is more than a transaction; it’s a turning point in your life. Whether you’re years away or in the early stages of preparing for a sale, your decisions today will determine what your company is worth tomorrow.

At Ensign Partners, we believe that any business owner whose ultimate retirement goal involves selling the business needs to consider valuation from the early stages. A strategic plan that keeps its focus on the end goal not only enables you to sell your business on your own terms but also gives you maximum flexibility should you need to revise your timing when unexpected circumstances arise.

Here are eight key value drivers we believe are critical for elevating your company’s worth and empowering you to choose your next move.

1. Financial Performance: Profit Today, Predictability Tomorrow

Buyers don’t pay for history; they pay for the future. They’re seeking clear, reliable cash flow and a path to long-term profitability. It's not about how much profit your business made last year, but how confident a buyer can be in its ability to generate consistent income moving forward. That means clean books, solid margins, and a well-documented financial story. Profit gives you freedom now; reliable profit builds wealth that lasts.

Your business needs long-term strategic goals that base future profitability on reliable, proven metrics that are demonstrable.

2. Revenue Growth: Teachable, Valuable, Repeatable

Growth comes down to two options: sell more of what you produce to your existing customers or expand the number of customers you sell to. But growth is only valuable if it’s sustainable, and that requires products or services that check three boxes:

• Teachable: Can your team (not just you) sell or deliver it?
• Valuable: Does (and will) the market need it enough to pay for it?
• Repeatable: Can you continue to do it without reinventing the wheel?

Marketable businesses are not reliant on a few rainmakers or one-off deals. Buyers want a model that scales.

3. Switzerland Structure: No Single Point of Failure

If your business depends too heavily on one customer, supplier, or key employee, that’s risk, and risk lowers valuation. The goal is to make your business independent. Spread your revenue sources, cross-train your team, and secure multiple supplier options. The less emotionally and operationally attached you are to any one relationship, the stronger your business becomes.

4. Valuation Teeter-Totter: Cash Efficiency Is King

You don’t need massive outside investment or inflated EBITDA to build a valuable company. For example, a business that was generating $30 million in revenue with minimal capital needs and strong cash flow sold for $165 million. Why? Because it was a cash machine.

Focus on reducing your working capital needs. Just as the basic principle of “buy low, sell high” will increase the value of your investments, a fundamental cash flow principle can be stated:

• Speed up how quickly you collect from customers
• Slow down how quickly you pay vendors (ethically and strategically)

Predictable, efficient cash flow is one of the fastest ways to increase your valuation.

5. Recurring Revenue: The Multiplier Effect

All revenue is not created equal. Businesses with recurring revenue models sell for significantly more, sometimes twice as much, compared to those with one-time transactions. Why? Predictability. Buyers will pay a premium for a steady stream of income they can count on.

Here are seven recurring revenue models:

• Consumables (e.g., coffee)
• Razor/Blade Model (low-cost item, high-margin refills)
• Subscription Content (magazines, SaaS)
• Sunk Cost + Subscription (golf simulators with monthly updates)
• Auto-Renewals
• Multi-Year Contracts (e.g., cell phones)
• Service Bundles (ongoing maintenance, support plans)

If you can bake recurring revenue into your business, do it.

6. Monopoly Control: Be First or Be Different

Differentiation drives value. If you’re not the only one doing what you do, then you better be doing it better and differently.

Ask yourself: What are the three things we do that no one else does like us? These “uniques” let you charge more, spend more on marketing, and build a brand that buyers view as hard to replicate.

7. Customer Satisfaction: Measure It, Improve It

How likely are your customers to recommend you to others? If your answer is “I don’t know,” you’re ignoring a critical metric that bears on your company’s value.

Your Net Promoter Score (NPS) is one metric that buyers increasingly look at. A score where at least 10–15% of your customers rate you a 9 or 10 is considered excellent. Anything less? You’re vulnerable.

Your goal is to build raving fans: customers who drive word-of-mouth and stick with you long term.

8. Hub and Spoke: Break the Owner Trap

If everything runs through you, your business isn’t a sellable entity; it’s a job with overhead. Buyers want businesses that can function without the founder at the center.

If your business is chained to your performance, your welfare and that of your family and employees is riding on your health and well-being—talk about pressure and stress.

The solution? Build a leadership team. Empower them. Let them make decisions. Train yourself to delete and delegate. Your most important job is to make yourself irrelevant to the day-to-day operations.

Bottom Line: Start Now

Your business’s value is not measured simply by what it earns, but how it earns. By encompassing these eight drivers into your strategic operations, you’ll boost your company’s appeal to buyers and build a stronger, more self-sustaining business in the process.

If you're thinking about selling—or just want more freedom—start by building a strategic plan now that aligns your present operations with your future goals. Ensign Partners can help.