EBITDA Acceleration Strategy
Find the margin leaks.
Raise earnings before market entry.
Buyers multiply the earnings they believe will continue. Every unsupported dollar gets cut in diligence. We find the leaks, fix the ones that stick, and document the rest so the number you take to market is the number that survives.
Confidential. No obligation. Built for owners 12–18 months from a sale process.
Your information is 100% confidential. We never sell your data.
A dollar of EBITDA is worth the multiple. A dollar of hope is worth nothing.
Most Main Street and lower-middle-market deals are priced off adjusted EBITDA or seller’s discretionary earnings. A documented $200,000 improvement at a 5x multiple is $1 million of enterprise value. The same $200,000 claimed as an add-back, with no invoices, gets removed in quality of earnings.
Acceleration is the work that shows up in the trailing twelve months. Normalization is the bridge that explains what will not continue under a new owner. We do both. We do not dress up a weak margin with a long add-back list.
$1.0M of EBITDA at 5x is $5.0M. Add $200k of earnings a buyer accepts and the same multiple is $6.0M. That is the arithmetic. Acceptance is the hard part.
- Undocumented personal expenses
- “We will raise prices after close”
- Deferred maintenance dressed up as profit
- One-time revenue treated as run-rate
Smaller owner-operated sales are often framed on seller’s discretionary earnings, which keeps owner pay in the number. Larger and institutional buyers want EBITDA after a market-rate manager. We build the bridge that matches the buyer you are actually going to meet.
Six places profitability usually hides.
We start with the P&L a buyer will rebuild, then rank leaks by how fast they show up in trailing earnings.
Price and discounting
Many owners underprice because a lost customer feels worse than a thin margin. A 3% to 5% increase, annual escalators, and an end to habitual discounting often clear without a volume collapse — if they are in the books before diligence, not in a projection.
Cost of goods and job mix
Low-margin work that consumes the best people is a leak. We separate contribution by service line, customer, and job type, then shift effort toward the work a buyer will actually want to keep.
Vendor and overhead waste
The top vendors by spend get benchmarked 12 to 18 months out. Duplicate software, unused subscriptions, freight, and off-contract purchasing are usually faster than a headcount fight. A small percentage on a large cost base is real EBITDA.
Labor that does not scale
Overtime, rework, and owner hours hiding inside “cost of sales” compress margin and transferability at the same time. Scheduling, a second lead, and a short automation list are margin work, not a tech project.
Related-party and personal costs
Above-market owner pay, family payroll for non-working roles, personal vehicles, club dues, and below-market rent to an owner entity all get restated to arm’s length. Buyers accept these when the market rate is documented. They reject them when it is a story.
Deferred maintenance dressed as profit
Skipping equipment, fleet, or software spend inflates a year and gets reversed in a capex review. We would rather show a normal maintenance level than defend a spike the buyer will haircut anyway.
How the strategy runs
Sequence matters. A price increase with no cost map just moves the argument.
Rebuild trailing earnings
Three years of P&L, by month if we can get it. Reported profit, cash profit, and the first pass at adjusted EBITDA or SDE. This is the number a buyer starts from, not the number on last year’s tax return.
Separate leaks from add-backs
One list is historical and defensible: personal, one-time, non-operating, above-market owner cost. The other list is operating: price, mix, vendors, labor, waste. Only the second list changes the business. Both lists need a file.
Install the changes that hit the TTM
Price resets, escalators, vendor rebids, and mix shifts go in early enough to appear in trailing twelve-month results. A buyer underwrites what already happened. A projection is a conversation, not a multiple.
Hand over a bridge, not a spreadsheet story
Each adjustment gets a rationale, a document, and a floor. Quality of earnings will test every line. The goal is to walk in with the number their accountant will mostly agree with.
Inflating the year you sell is not a strategy.
Buyers have seen the playbook. Cut maintenance, pull revenue forward, bury a one-time project in run-rate, and hope diligence is light. It is not. Those moves cost more in re-trade than they add in the teaser.
Personal expenses, true one-time legal or consulting, excess owner compensation versus a market replacement, non-operating items.
Deferred capex, below-market owner pay with no plan to replace it, related-party rent with no market comp, savings that have not happened yet.
12 to 18 months before market entry is the window where price and cost work lands in the period a buyer will pay for.
Questions owners ask first
Get the earnings number a buyer will keep.
Tell us the rough margin and the timing. A member of our team will map the leaks worth fixing before you go to market.
Confidential consultations • Trailing results, not projections • No obligation
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