Two years of prep work put $4.86 million more in the owner's pocket
On his own, a $500,000 EBITDA business gets about a 5x. That is $2.5 million on day one. He waited, we went to work, and he walked away with $7.36 million after every fee we charged him.
We doubled the earnings, then we moved the multiple
Two separate things happened, and owners only ever think about the first one. The earnings went from $500,000 to $1 million, which doubles the value on its own. Then the multiple moved from a 5 to an 8, and on the bigger earnings that was worth $3 million by itself. The multiple was worth more than the earnings.
Bars are cumulative. Each one starts where the last one finished. The valuation went up $5,500,000, which is 3.2 times what the business was worth when we started.
$2.5 million to $8 million
Doubling the earnings did $2.5 million of that. Moving the multiple did the other $3 million.
Two years, and we stopped charging the monthly fee after the first one
Prep consulting
$2,500 a month. We build the EBITDA from $500,000 to $1 million. This is the only monthly fee he ever pays.
Monthly fee stops
The consulting engagement ends. Now we prepare the company directly for market. No monthly billing through any of it.
Goes to market
Into a synchronized competition with hand picked acquirers, on a level playing field.
Sold at 8x
$8 million. Our success fee comes out of the closing, and the $30,000 he already paid us comes off it.
He paid us once, at the closing
Every dollar of prep consulting came back off the success fee at closing. He was never charged twice for the same work.
The fee is not the number that matters
$640,000 sounds like a lot
It is, until you put it next to the $5.5 million of value that was not there two years earlier.
Selling on day one was an option
$2.5 million, no fees, no waiting. He would have left $4.86 million on the table to save $640,000.
Preparation is the whole game
Buyers pay the most for the highest earnings, the lowest risk, and growth they can count on. That gets built, not negotiated.
“My goal was to find a buyer/partner who would represent my company as passionately as I did, get a good valuation, and grow my way with their help. The MHA team helped me hit a grand slam. I got everything I was seeking. They exceeded my expectations, and my expectations are set high.”
A real client engagement, with the figures rounded for simplicity. Twenty four months total: twelve months of preparatory consulting at $2,500 a month, followed by market preparation at no monthly fee, then a sale at 8x. The $4,860,000 is already after every fee.
What would two years of preparation be worth to your valuation?
