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Introduction: Sell When it’s Great
Most entrepreneurs start thinking about selling their company when:
- the market slows down,
- clients begin to leave,
- costs are rising,
- and the founder is close to burnout.
It’s a natural reaction — but strategically, it’s a mistake.
The Exit Paradox: Sell When Things Are Going Well
You achieve the best price for your company when:
✅ revenues are growing,
✅ your sales pipeline is full,
✅ profit margins look healthy,
✅ and your USP clearly sets you apart from the competition.
Investors love growth phases.
The market rewards those who accelerate, not those who are slowing down.
When your company is taking off — your valuation rises.
When it starts to lose altitude — your valuation drops.
Why Read This Guide
In this guide, you’ll learn:
- when to sell your company to hit the valuation peak
- how to prepare your organization “tip-top” before entering the process
- how investors evaluate EBITDA, growth, and valuation multiples
- how to avoid earn-outs and difficult negotiation traps
- which common mistakes can ruin a deal
- how to maintain control of the process and keep business operations stable
Where This Knowledge Comes From
This content is based on the experience of entrepreneurs, advisors, and real market case studies — all summarized in our e-book “How to Sell Your Company ?”
Our mission:
to help founders sell their company at the top.
Key Takeaway
Don’t wait until you have to sell.
Prepare your company for sale when you don’t have to.
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When to Sell Your Company? – Key Elements
Why the Best Time to Sell Is When Things Are Going Well
One of the most common mistakes entrepreneurs make is postponing the decision to sell until the business starts losing momentum.
It’s understandable — as long as the numbers look good, it feels counterintuitive to think about an exit.
However, experience shows that the best valuations are achieved when a company is growing, not when it’s stagnating.
When your business is generating rising revenues, healthy margins, and a loyal customer base, investors see it as attractive and full of potential.
That’s the moment when you can negotiate the most favorable terms — both in price and deal structure.
On the other hand, selling during a downturn, financial strain, or operational chaos often leads to a significantly lower valuation. Investors analyze numbers with precision and can quickly spot the signs of a weakening business model.
👉 Takeaway: Start thinking about selling when the business is strong and stable. That’s when you have real leverage over your company’s valuation.
USP — The Key Driver of Company Value
A major factor that determines how attractive your company is to investors is its USP (Unique Selling Proposition) — the unique value or competitive edge that sets you apart and makes customers choose you.
A strong USP directly translates into higher profitability, customer loyalty, and steady revenue growth — all of which form the foundation of a higher valuation.
Companies with a well-defined USP typically achieve higher EBITDA multiples and attract more investor interest.
A great example is the story of the Karwatka brothers from Divante, who — after refining their business model and building a clear competitive advantage — sold their company for several hundred million PLN.
👉 Takeaway: If you want to sell your company for the best price, focus on building a strong USP. This is the key that makes investors see the potential, not just numbers.
Owner Independence — The Foundation of a Successful Exit
A high valuation means little if your company is completely dependent on you as the founder.
For an investor, the key is whether the business can operate efficiently after you leave.
If you personally manage all key clients, make most operational decisions, and oversee every process, an investor will see that as a red flag.
Such a company isn’t scalable — and that lowers its value.
To prepare your company for a professional sale:
👉 delegate responsibilities and decision-making,
👉 build a second layer of management,
👉 document processes and institutional knowledge,
👉 implement control mechanisms that don’t rely on your daily presence.
The most valuable companies are like well-engineered rockets — with strong propulsion, a clear direction, and a crew capable of steering independently.
The founder can watch proudly from mission control, knowing the rocket flies smoothly without their hands on the controls.
In Short
The best time to sell your company is when you’re at your strongest — when you’re growing, have a clear USP, solid financials, and a team capable of running the business independently.
That’s when you don’t need to sell — but can do it entirely on your own terms.
How to Prepare Your Company for Sale — The “Tip-Top” Plan
Selling a company isn’t a sprint — it’s a carefully planned process.
The earlier you start preparing, the higher your chances of success — and of closing the deal on your terms.
Below are four key areas that have the greatest impact on valuation and the overall transaction outcome.
1. Shareholder Alignment — A Unified Goal and Vision
Every transaction starts with a conversation at the table, not with a spreadsheet.
Before you take any action, make sure all shareholders have the same answers to a few critical questions:
Why are we building this company?
When — and under what conditions — do we want to sell it?
Are we all ready for that moment?
Lack of alignment is one of the most common reasons why the sale process stalls.
A shared vision and clearly defined collaboration rules (for example, in a shareholders’ agreement) help prevent conflicts when a real offer appears.
💡 Tip:
Even if your company has been around for years, it’s worth revisiting the conversation about your goals. The market changes, and so do individual motivations and personal circumstances.
2. Financial and Operational Clarity — The Foundation of Valuation
For investors, numbers are the language of trust.
Even a great brand won’t hold up if the financial data is incomplete or chaotic.
Key elements to organize before entering a sale process:
- a current P&L (profit and loss statement) in managerial form — broken down by business lines, products, or services,
- unit economics — profitability per client, project, or segment,
- a budget and forecast showing the company’s growth trajectory,
- regular reports and KPIs presenting gross margin, EBITDA, and cash flow trends.
According to global M&A studies, over 70% of transactions result in a reduced valuation due to errors or inconsistencies in financial data.
💡 Tip:
Treat accounting and reporting as management tools — not just compliance obligations.
Professional budgeting and controlling not only boosts valuation but also makes daily decisions easier and more data-driven.
3. Professional Management — You’re Selling the Company, Not Yourself
Investors buy businesses that can run independently.
If all key decisions and know-how sit in your head, the transaction risk rises — and your company’s value drops.
That’s why it’s worth building a management team early enough to take over the founder’s operational duties:
👉 a CFO or Head of Operations,
👉 a Sales or Marketing Lead,
👉 a Product or Technology Manager.
A professional management team signals maturity and scalability.
It allows you to lead the sale process without putting day-to-day operations on hold.
💡 Tip:
Investors are far more likely to buy a company where the owner plays a supervisory, not operational, role.
4. Organizational Culture and Processes — The Invisible Capital
In service and tech businesses, people are the greatest asset.
That’s why investors now look not only at financial results but also at organizational culture and operational processes.
To increase your company’s value:
- build a consistent set of values and a clear working culture,
- measure NPS (Net Promoter Score) to track customer satisfaction,
- maintain high team retention — it reflects stability and competence,
- standardize key processes (sales, customer service, recruitment).
A culture that promotes quality and accountability translates into measurable results — lower customer churn, higher productivity, and stronger brand perception.
💡 Tip:
Investors often treat high NPS and low team turnover as hard non-financial indicators that directly influence valuation.
In Short
A well-prepared company is one that can operate and grow without its owner.
If you have clear financials, aligned shareholders, a strong management team, and a stable organizational culture — the sale process becomes a natural, not stressful, stage of growth.
Maximizing Company Valuation — How to Reach 10x+ Multiples
Once your company is well-prepared — with organized finances, a strong team, and solid processes — it’s time to tackle the key question:
“How can I sell my company for the best price and achieve the highest valuation?”
Many factors influence the final transaction value, but four of them play a decisive role.
1. Auction Process — Competition Drives Price
Selling your company to a single investor rarely delivers the best outcome.
A far more effective approach is running a structured auction process, where multiple buyers review your company simultaneously and submit competing offers.
This approach builds competitive tension, strengthens your negotiation position, and can significantly increase your EBITDA multiple.
In practice, it can make a difference of tens of percent in the final valuation.
🚩 Red flag: If a potential investor insists that you not speak to other buyers, take it as a warning sign. Always test the market and compare offers.
2. M&A Advisors — A Cost That Pays for Itself
Selling a company is a complex endeavor: it requires preparing documentation, valuation models, investor materials, coordinating due diligence, and negotiating the purchase agreement.
That’s why the support of a professional M&A advisor often determines the success of the entire transaction.
A good advisor will:
👉 manage the process from both the technical and communication sides,
👉 help you choose the right sale structure,
👉 prepare you for negotiations,
👉 ensure that key protective clauses for the seller are included.
While an advisor’s fee (typically 1–3% of the transaction value) might seem high, in practice it often increases the final valuation by several or even dozens of percent.
In other words — it’s an investment, not a cost.
💡 Tip:
Choose advisors with proven experience in your industry who can access the right network of investors.
3. EBITDA Multiples — What Really Drives Valuation
In most transactions, a company’s value is based on its EBITDA multiple — a measure of operating profit before interest, taxes, and depreciation.
It’s a simple yet powerful indicator.
Several key factors directly influence the multiple:
Revenue growth rate — the faster and more consistent, the higher the multiple,
EBITDA margin — high profitability reflects an efficient business model,
Client diversification — reduces dependency and revenue risk,
Market position and competitive advantage,
Presence of large, recognizable clients,
Industry outlook and geographic market potential.
For example, service companies with an EBITDA margin above 30% and annual revenue growth of 20%+ can reach multiples of 10–12x EBITDA, while less stable businesses with margins below 15% are often valued at 4–5x.
💡 Tip:
Analyze your performance from an investor’s perspective.
Monitor growth, profitability, and client structure regularly — these are the metrics that directly shape your company’s valuation.
4. Earn-Outs — When and Why to Avoid Them
In many transactions, investors propose an earn-out — a mechanism where part of the payment is deferred and linked to the company’s future performance.
At first glance, it sounds attractive: “You’ll earn more if the company continues to grow.”
In reality, earn-outs often create additional risks and reduce your independence after the sale.
The second payment may depend on factors outside your control — such as the new owner’s decisions or market fluctuations.
Whenever possible, negotiate the largest possible cash at closing — the payment received upon signing.
Earn-outs should only be accepted if they are clearly defined, measurable, and realistically achievable.
💡 Tip:
If an investor insists on an earn-out, set a clear time limit (e.g., 12–24 months) and specific payout conditions.
In Short
Maximizing your valuation is the result of consistent preparation and a well-planned sales strategy.
When you have clean financials, stable growth, and a smart transaction structure, you can achieve premium multiples — and sell your company on truly favorable terms.
Deal Breakers — What Most Often Derails a Company Sale
Even the best-prepared sale process can fall apart at the final stage.
Sometimes due to external factors — but far more often because of mistakes that could have been anticipated and avoided earlier.
Below is a list of the most common deal breakers — issues that can destroy investor confidence and end negotiations before the contract is signed.
1. Lack of Complete Knowledge About Your Own Business
This is one of the most common problems, especially in fast-growing companies.
Founders often lack up-to-date, consistent data on:
👉 profitability by client, project, or product,
👉 revenue structure,
👉 fixed and variable costs,
👉 key performance indicators,
👉 and which areas generate the highest margins.
Such gaps become obvious during due diligence or investor Q&A sessions.
At that stage, any uncertainty can be interpreted as risk.
💡 Tip: Prepare a Virtual Data Room (VDR) with a complete set of financial, operational, and legal documents.
Show that you have full control over your business and its performance.
2. Financial Chaos — The Biggest Enemy of Valuation
Inaccurate reports, undocumented transactions, or unclear settlements between the company and the owner — these are classic red flags for investors.
Each of them reduces trust and the final valuation.
The most common issues include:
👉 discrepancies between accounting data and management reports,
👉 missing cost allocation by project or client,
👉 irregular tax payments or outstanding obligations,
👉 non-transparent transactions between the company and its owner.
💡 Tip:
Treat financial order as an investment in company value.
Every single misclassified expense can reduce your valuation tenfold (for example, at a 10x EBITDA multiple).
3. Overdependence on the Founder
If the company cannot function without its owner, most investors will either walk away — or propose an earn-out to mitigate the risk.
From an external perspective, it’s simple:
if the founder is the only person managing key clients, leading negotiations, and overseeing operations, once they leave — the company’s value leaves with them.
4. Unresolved Legal and Tax Issues
Even minor legal or formal irregularities can completely stop the transaction process.
Examples from real deals include:
👉 unsettled ownership shares,
👉 missing intellectual property rights to code, products, or marketing materials,
👉 outstanding liabilities to tax or social security authorities,
👉 inconsistencies in client or supplier contracts,
👉 aggressive tax optimization schemes.
💡 Tip:
Before entering investor discussions, conduct an internal legal and tax audit.
It’s a simple step that can save months of stress and stalled negotiations.
5. Losing Focus on the Core Business
The sale process is both time-consuming and emotionally demanding.
Many founders get so deeply involved in negotiations that they lose sight of day-to-day performance.
If revenue or margins decline during the process, investors will immediately notice — and lower their offer.
💡 Tip:
If possible, delegate the sale process (e.g., to an M&A advisor) and stay focused on maintaining operational stability.
For investors, recent numbers matter more than promises.
In Short
The most common deal breakers don’t come from the market — they come from internal disorganization, lack of data, and founder dependency.
The good news?
Every one of these issues can be fixed — as long as you start preparing early enough.
Summary — How to Sell Your Company for the Best Price
Selling a company is one of the most significant moments in an entrepreneur’s life.
It’s not just a financial transaction — it’s a strategic decision that requires maturity, planning, and consistency.
From this guide, you can take away a few key lessons:
The best time to sell your company is when the business is growing and delivering stable results.
A strong USP and independence from the owner are key factors that significantly increase valuation.
Clean financials and well-organized operations are not formalities — they’re prerequisites for success.
A professional management team and structured processes enhance your company’s credibility.
A well-managed sale process and the right advisor can boost your EBITDA multiple by several points.
Most deal breakers arise from internal chaos — in data, structure, or communication.
All of this leads to one essential conclusion:
The best time to sell your company is when you don’t have to.
Founder Emotions — The Topic Nobody Talks About Enough
Every M&A process involves more than just numbers but also emotions: stress, uncertainty, and high-stakes decision-making.
We cover this topic in greater depth in our e-book:
📘 “How to Sell Your Company for the Best Price”
You’ll find practical guidance, checklists, and real experiences from founders who have gone through the process — from the first investor talks to the final signature.
Who We Are and How We Can Help
This guide was prepared by the team at Incro — a consulting firm that has been supporting entrepreneurs for years in:
✅ management accounting and financial controlling,
✅ preparing companies for sale and M&A processes,
✅ building long-term business value through data, strategy, and professional reporting.
We help founders:
- organize and optimize their financials,
- build reliable management reports,
- prepare their companies for investor discussions,
If you’d like to learn how we can support your business:
👉 visit us at incro.us or contact our team directly.
📌 Final Thought
Selling your company isn’t just the end of a chapter — it’s the beginning of a new stage of entrepreneurship.
A well-prepared business, sold at the right moment, gives you freedom of choice, time, and resources to build something even greater.
