M&A Video Series: Know Your Ideal Multiple

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Here’s the fifth installment of F12’s M&A Video Series: Know Your Ideal Multiple

Do you know your ideal multiple?

You’ve put in the years of hard work, and you’re finally ready to sell your business. You know how much your ideal asking price is—but what will a potential buyer think of that multiple? Is it well-considered? Do the numbers add up? When creating a valuation for your business, consider these factors: 

  • How much of your revenue is recurring vs re-occurring?
  • What are your margins like?
  • Which of your services or products is driving the healthiest profit margins?
  • What does your EBITDA (bottom line) look like?

Michael Contento, F12’s Managing Partner and Business Innovation Executive, has played the M&A game from both sides of the table: as the seller and as the buyer. Countless times, he’s seen entrepreneurs come to the bargaining table with an unrealistic number. And that is why it’s so important to know your ideal multiple before stepping foot into the negotiating room: a potential buyer won’t want to play ball with you if your number is illogically high, nor will they give your business a second glance if you’ve valued it too low.

At F12, we value a well-run organization, and we want to pay you your ideal multiple for it. That’s because we want to work with companies that have the same killer instinct that we do. To learn more about discovering your ideal multiple when selling your business, check out Michael’s blog post on how to determine your ideal multiple.

Have more questions about your business? Want to learn more about my M&A Video Series: Know Your Ideal Multiple? Reach out to me at mcontento@f12.net. Let’s chat.