Selling a company is often the single most significant financial milestone for an entrepreneur or a family-owned group. And yet, it is also the moment when the most value is lost for a reason that is both common and avoidable: the company is not prepared to be assessed (and acquired) as an investment-grade asset<\/strong>.<\/p>\n In real-world M&A, the final price rarely depends only on \u201chow well the business is doing\u201d or how much it invoices. It depends on four questions a sophisticated buyer will try to answer as early as possible:<\/strong><\/p>\n The typical gap between the \u201cvalue\u201d an owner feels and the value the market pays comes from this difference in mindset. The owner sees effort, relationships, reputation, and sacrifice. The buyer sees future cash flows with uncertainty\u2014and uncertainty is discounted.<\/strong><\/p>\n This guide provides a practical framework to answer the question \u201chow do I increase the value of my company?\u201d<\/strong> with a 12 to 24 month horizon<\/strong> (up to 36 months if you aim for a deeper transformation). The goal is not only to sell at a higher price; it is to sell better: less friction, more buyer competition, fewer last-minute retrades, and fewer post-sale liabilities.<\/p>\n The first key mental shift is to separate the value of the business from the money the shareholder receives.<\/p>\n Enterprise Value (EV)<\/strong> represents the value of the operating business\u2014the \u201ccash-generating machine.\u201d In the middle market it is often approximated as:<\/p>\n EV = Normalized EBITDA \u00d7 Multiple<\/strong><\/p>\n But the shareholder does not take EV home. What they receive is Equity Value<\/strong>, which is obtained after adjusting for net financial debt<\/strong> and the working capital<\/strong> level agreed at closing.<\/p>\n In other words: you can have a high EV and still receive less cash if you reach closing with high net debt\u2014or if you \u201chand over\u201d hidden cash through excess inventory or uncollected receivables.<\/p>\n This matters because many companies focus on \u201cincreasing EBITDA\u201d and overlook two frequent sources of value leakage right at the end: Here is one of the most powerful (and most misunderstood) ideas in valuation: a company that does not grow is not valued like a company that grows well<\/strong>. Even with the same current EBITDA, the market will often pay different multiples because the multiple is ultimately the price of two things: risk<\/strong> and expected growth<\/strong>.<\/p>\n A buyer pays more for a growing company for three reasons:<\/p>\n That said, growth only increases the multiple if it is credible<\/strong> and profitable<\/strong>. If you grow by cutting prices, increasing complexity, consuming cash, or inflating working capital, you may be increasing risk. More risk often means a lower <\/strong>multiple\u2014even if revenue is rising.<\/p>\n In a transaction, it is not enough to say \u201cwe grow 20%.\u201d The buyer will ask: why, at what margin, with what cash profile, and is it repeatable?<\/strong><\/p>\n Growth that typically earns a \u201cmultiple premium\u201d is supported by:<\/p>\n Many entrepreneurs assume valuation is set using the last annual accounts. In practice, the last closed fiscal year is an important base\u2014but price moves significantly based on two elements:<\/p>\n Why the last closed year matters:<\/strong> it is the anchor the buyer considers auditable and comparable. If it reflects \u201cnormal\u201d performance, it helps defend value. If it was exceptional (very high or very low), the buyer will push to adjust to a \u201cnormalized\u201d level and request evidence.<\/p>\n Why current trading can raise or lower the price:<\/strong> current trading is the thermometer. If the year-in-progress confirms growth, margins, and cash conversion, the buyer may value the company using a figure closer to a run-rate<\/strong> (annualizing a strong YTD) or LTM<\/strong> (last twelve months), rather than staying anchored to the last fiscal year.<\/p>\n If current trading deteriorates, the buyer tends to re-trade<\/strong>: renegotiate price, introduce an earn-out, or tighten protection terms. This can happen even in good businesses\u2014because nobody pays as if the company were still at a level it no longer is.<\/p>\n What a \u201ccurrent trading pack\u201d is (and why it protects value):<\/strong> a prepared company goes to market with a clear, defendable pack: consistent monthly closes, a bridge from last closed year to YTD, margin drivers (mix, pricing, costs), working capital evolution, and commercial evidence (pipeline, contracts, churn\/retention, backlog).<\/p>\n This is where internal organization and the quality of the finance team make a direct difference\u2014hence why an interim\/outsourced CFO approach can have tangible ROI: it does not only improve management, it improves your ability to defend value<\/strong> when the buyer challenges current trading.<\/p>\n A buyer does not pay only for results; they pay for continuity<\/strong>. Continuity is built through organization<\/strong> and a management team<\/strong> that can sustain the business without dependency on the founder. If the owner is simultaneously the Head of Sales, the Head of Operations, and the person solving all critical issues, the buyer sees key person risk<\/strong>. That risk typically translates into:<\/p>\n Professionalizing the organization is not about adding bureaucracy\u2014it is about installing a replicable system: monthly reporting, key KPIs, minimally documented processes, clear responsibilities by function, and a second line with real decision-making capacity.<\/p>\n Management team quality has a meaningful impact on both deal success and price: if the buyer does not trust the team, they perceive higher risk, reflect it in the value, or simply walk away.<\/p>\n Higher EBITDA increases value because it is multiplied by the multiple. But in M&A, the buyer pays for the EBITDA they believe is sustainable<\/strong> and defendable<\/strong>.<\/p>\n EBITDA normalization (without \u201cwindow dressing\u201d):<\/strong> in SMEs, accounts often blend personal, discretionary, or non-recurring items. Normalization aims to show the true economic profitability a buyer would receive. Typical add-backs relate to off-market compensation, non-operating costs, and one-offs. The key is evidence: if it cannot be documented and explained, the buyer will likely remove it.<\/p>\n Margin and pricing power:<\/strong> growth with margin is worth more than growth achieved through discounting. Defending margin requires knowing profitability by customer, reviewing cost-to-serve, and implementing a pricing strategy (indexation, periodic reviews, mix management).<\/p>\n Recurrence:<\/strong> recurring revenue raises the multiple because it reduces uncertainty. If the model is transactional, many companies create recurrence through maintenance, consumables, services, contracts, retainers, or multi-year agreements.<\/p>\n Commercial risk penalizes both the multiple and the deal structure. Customer concentration is the most common example: the more the business depends on one or two customers, the more likely a buyer will demand an earn-out or reduce price.<\/p>\n The real solution is to dilute concentration through growth across customers and sectors. If time is short, the focus shifts to mitigation: long-term contracts, operational integration, institutionalizing the relationship (so it does not depend on the founder), and increasing switching costs.<\/p>\n Many deals are re-traded at the end due to net debt and working capital adjustments.<\/p>\n A practical tool to anticipate buyer scrutiny and reduce late-stage renegotiations is a Vendor Due Diligence<\/strong> (see link at the end).<\/p>\n Tax does not create operating value, but it can materially change the net proceeds<\/strong> the seller keeps. That is why serious sale preparation should include early structuring\u2014especially for family-owned groups.<\/p>\n In general (and always depending on the specific case), selling shares as an individual is not taxed the same way as selling through a corporate holding structure. In Spain, where the seller is a company, a partial participation exemption regime may apply to capital gains on the sale of shareholdings, subject to conditions and limitations. This can be particularly relevant where the objective is to reinvest and manage wealth more efficiently post-sale.<\/p>\n Creating or reorganizing a holding structure is not a last-minute exercise: it requires time, correct design, and analysis of requirements, anti-abuse considerations, and implementation costs. It is also not always optimal if the seller needs immediate personal liquidity or has specific constraints.<\/p>\n A useful roadmap is not an endless checklist; it is a sequence that creates evidence of improvement.<\/p>\n It depends on the starting point. Increasing EBITDA has a direct effect, but lifting the multiple usually comes from reducing risk and proving credible growth. The best outcomes combine both: stronger EBITDA and a stronger risk profile (organization, team, recurrence, diversification).<\/p>\n A lot\u2014if it is high-quality growth. A company that grows with margin, cash conversion, and processes can justify higher multiples because the buyer is effectively buying an EBITDA ramp. Growth that consumes cash or erodes margin can increase risk and hurt the multiple.<\/p>\n Because it is the verifiable base to normalize EBITDA and compare trends. If the last year was \u201cabnormal,\u201d the buyer will push to adjust to a sustainable level and ask for supporting evidence.<\/p>\n It is the performance of the year in progress (sales, margin, EBITDA, cash) and often determines whether the last closed year represents the \u201cnew normal.\u201d Strong current trading can support LTM\/run-rate valuation; weak current trading often triggers re-trades or earn-outs.<\/p>\n Ideally 12 to 24 months before. You need time to implement improvements, show trend evidence, and reach the market with clean documentation and credible reporting.<\/p>\n Organization reduces uncertainty. Monthly reporting, clear KPIs, minimal documented processes, and defined responsibilities signal control, accelerate due diligence, and reduce re-trades. That is reflected in the multiple and in fewer closing deductions.<\/p>\n Continuity: can the team run operations, sales, and finance without the founder? A strong team reduces key person risk, improves the multiple, and lowers reliance on earn-outs.<\/p>\n A pre-sale diligence review commissioned by the seller to identify and fix issues before going to market. It reduces surprises, accelerates the process, and protects price against last-minute deductions.<\/p>\n It can be, especially for tax efficiency and reinvestment, but it depends. It requires planning, meeting conditions, and avoiding improvised structures. The key is to work on it early with specialist advice.<\/p>\n Run a serious diagnostic with a clear \u201cvalue levers map\u201d: normalized EBITDA, risks, growth, current trading, working capital, and management readiness\u2014then build a 6\u201318 month plan that truly moves price.<\/p>\n In a sale, what makes the difference is not generic advice\u2014it is an executable plan and a well-run process. In practice, Maraz typically creates value across four fronts directly linked to price:<\/p>\n Value is not determined by what you know about your business; it is determined by what the buyer can understand, verify, and confidently project. That is why the best exits are not only achieved by companies with strong EBITDA\u2014but by companies with credible growth, robust current trading, strong organization, and a management team that signals continuity.<\/p>\n If you are considering a sale in the next 12\u201336 months, the moment to maximize price is not when you already have an offer on the table. It is now\u2014while you can still strengthen the structure, improve data quality, plan tax properly, professionalize the management team, and go to market with a company that is \u201cbuyable\u201d from day one.<\/p>\n\n
The real mechanics of price: EV, Equity Value, and the \u201cbridge\u201d that determines the cheque<\/h2>\n
(i) the working capital adjustment<\/strong>, and
(ii) contingencies discovered in due diligence that translate into price chips, escrows, or earn-outs<\/strong>.<\/p>\nWhy growth changes the multiple (and why \u201cgrowing\u201d does not always add value)<\/h2>\n
How growth turns into a higher multiple<\/h3>\n
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The quality of growth: the question that decides valuation<\/h3>\n
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The last closed year and \u201ccurrent trading\u201d: what truly drives negotiations<\/h2>\n
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Transferable value: organization and the management team as \u201cprice multipliers\u201d<\/h2>\n
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Levers to increase your company\u2019s value<\/h2>\n
Lever 1: Normalized EBITDA and earnings quality<\/h3>\n
Lever 2: Reduce risk to lift the multiple (especially concentration risk)<\/h3>\n
Lever 3: The final cheque is won (or lost) in the balance sheet and working capital<\/h3>\n
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Preparing the tax structure: a holding company as a lever (vs. selling as an individual)<\/h2>\n
A realistic 24-month roadmap to increase value<\/h2>\n
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FAQs: \u00a0how to increase your company\u2019s value before selling<\/h2>\n
What increases value more: EBITDA or the multiple?<\/strong><\/h3>\n
How much does growth influence the multiple?<\/strong><\/h3>\n
Why is the last closed year so important?<\/strong><\/h3>\n
What is current trading and why can it change price?<\/strong><\/h3>\n
When should you start preparing for a sale?<\/strong><\/h3>\n
How does internal organization affect price?<\/strong><\/h3>\n
What does a buyer look for in the management team?<\/strong><\/h3>\n
What is Vendor Due Diligence and why is it helpful for the seller?<\/strong><\/h3>\n
Is it a good idea to set up a holding company before selling?<\/strong><\/h3>\n
What should be the first step if I plan to sell in 12\u201336 months?<\/strong><\/h3>\n
How Maraz can help you increase your company\u2019s value before a sale: turn growth into multiple (and multiple into cheque)<\/h2>\n
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