Podcasts
Profit vs. Multiplier: The Key to Doubling Your Business Valuation with Kevin Harrington
When it comes to selling your business, most owners think it’s all about profit. But here’s a game-changing insight: your business valuation is driven by the formula Profit x Multiplier = Value. And the multiplier? That’s where the magic lies.
In the latest episode of the Exit Insights podcast, Darryl Bates-Brownsword and Kevin Harrington reveal how focusing on your multiplier can significantly boost your business’s valuation—and how to get started today.
What’s the Multiplier, and Why Does It Matter?
The multiplier reflects your business’s perceived risk and growth potential in the eyes of a buyer. A low-risk, well-structured business might command a multiplier of 6x, while a riskier one might only see 3x. Here’s the kicker: doubling your multiplier can double your business valuation, even without increasing profit.
How to Boost Your Multiplier
💡 Focus on Intangibles: Buyers value businesses with strong brands, great cultures, and proven systems in place. If your team is loyal, your processes are seamless, and your brand has a stellar reputation, your business becomes far more attractive.
💡 Reduce Risk: Show buyers that your business isn’t overly dependent on you or key staff members. Systemise processes, diversify revenue streams, and ensure your financial records are spotless.
💡 Think Long-Term: Building value takes time. The earlier you start preparing, the more opportunities you’ll have to strengthen your business and maximise its valuation.
What About Profit?
Profit matters, of course—but cutting costs isn’t always the answer. Excessive cuts can harm team morale, unsettle buyers, and damage long-term value. Instead, focus on sustainable strategies, like refining your product offerings or entering new markets, to drive growth.
🎧 Ready to learn more?
Listen to this episode of the Exit Insights podcast to discover actionable tips for maximising your business valuation and exiting on your terms. [Insert podcast link]
Watch the episode here:.
Welcome to the podcast that’s dedicated to helping business owners maximise valuation and exit on their terms. This is the Exit Insights podcast presented by Succession Plus. I’m Darryl Bates- Brownsword and again, I’m joined with my partner here, Kevin Harrington. Welcome to this week’s episode. Kevin, how are you?
Hi, Daryl. Yes, very well, thank you. Things are looking good.
Excellent. So we’ve been talking about maximised valuation and you know, I guess we’ve just been making assumption that everyone knows what that means fully. So why don’t we dig into today what it means to maximize the valuation of your business when you’re starting to think about exit so that you can get the most from your life’s work.
Yeah, that’s a good start point. And immediately when you ask, when you say that, I’m thinking of all the ways you can do it. And I think you’re quite right. We need to, first of all, talk about what our definition is of value for the sake of this conversation. for us, we’re always saying that value equals profit times a multiplier. And that’s quite straightforward. So the value is the amount of money the business is worth.
The profit is a fairly easy thing to understand. It’s the profit on the end of year accounts, et cetera. And it’s usually EBIT or EBITDA. And then it’s this magic thing called a multiplier. many businesses will be in the range of, I don’t know, three to 10 times multipliers, depending how risky they are, how likely that sector is to be successful. But the mystery to everyone is how do I get a better multiplier?
Do you have to accept the multiplier that you’re told your industry is? And that’s really what we’re talking about today, isn’t it? Is how can we consider in the right way the profit, but then how can we make that multiplier, so if it’s a million pound profit, how can we move that multiplier from four times to six times, for example, which would make two million pounds worth of more value?
Yeah, exactly.
There’s a lot of people out there talking about valuations and increasing valuation and maximising valuation and a lot of them come from a finance background. So yeah, I think you’re right. Let’s start with the premise of understanding how a buyer will value a business and a lot of it is that they’re basically going, what’s the future worth of your current profit? What’s the cash flow that I will get if I owned the business? So the first thing to note, it’s not your straight EBITDA.
It’s typically in an SME business, it’s an adjusted EBITDA that they’re looking at. And an EBITDA being earnings before earnings, before interest, tax, depreciation and amortisation.
So they’re looking for a number that they can compare with other businesses and equivalent businesses that they’re also assessing. It’s EBITDA in itself isn’t really useful to you as a business owner and running your business because it’s not a real cash flow number to give you an indication of the available cash.
So let’s just park it and a lot of people will probably criticise us for this and just go EBITDA is useful for when you’re valuing your business. So what is this adjusted valuation I talk of? Well, a lot of business owners take advantage of the opportunities to them for structuring how they take money out of the business. And a lot of them will take a smaller salary and higher dividends because it’s more tax efficient. They will I have some other benefits too, by being a business owner, there will be some expenses that the business can make that they benefit from personally, shall we say. This is not to criticise, but when a buyer looks at your business, they’re going to say, well, if I employ someone to do the role of the CEO of running the business, they’re going to want a proper salary. They’re going to want a full salary. And I will need to make some adjustments to what the business cash flows are going to look like what the business financials are going to look like if I were to own the business. And that’s what is often referred to as adjusted EBITDAO or adjusted financials. So there’s the first thing to be aware of as a business owner. The next point that you touched on, Kevin, is there’s a lot of people out there going, hey, look, we can maximise your business. Come to us. We’ll sell your business. We’ll maximise the valuation.
And what they do is all of they focus on the things that influence the P side. If the valuation is a profit times a multiple, there’s almost an assumption that every business in your industry gets a standard business multiple with some assumptions that are in place. I’m careful saying standard industry multiple, but it’s a generic.
And there are some assumptions that certain things are in order to achieve that multiple. And I think it’s important to say, well, a multiple is just a representation of risk. If your business has a high risk attached to it, well, they’re not going to want to multiply your profit by too many times. They’re going to reduce that profit forecast because if it’s risky, they’re saying the risk to those ongoing revenues are going to drop once the ownership changes.
So there’s a lot going on here, but a lot of people there, they’re just looking at the profit. They’ll go, first thing we need to do is tidy up your financials. Let’s get some good financial reporting in place. Let’s make sure you’re not overspending in your business compared to similar businesses. We’ll do some benchmarking there.
We’ll get all of your compliance in order. You need to have all your financial and corporate corporations law type of information all tidied up. So you need to be running a good healthy business. They’ll then start going, okay, well let’s get all of your contracts and all of your documentation in order and let’s get some good forward looking reporting in place so that it looks like you’ve been keeping your finger on the pulse quite quickly all the time which is great. These are things you should be doing anyway in your business. They’re good things to do to keep our track in your business. And you might even want to create a green room. A green room is that list of all of the documents and contracts and agreements you have in places with suppliers, with employees, with contractors, with everyone that you’re working with in your business so that a buyer can assess those straight up to place. So that’s what a green room would look like. They’re getting all that information in a handy place before you go into formal agreements and start setting up the data room. So there are most of the things that will influence the profit. Kevin, what else do you see and have you got experience around where people start maximising the valuation by improving the P side of the equation?
I think the profit side for many people is the easiest thing to identify. Intellectually, it’s quite a quick thing to get your head around.
It’s tangible, right?
Yeah. And I think there’s a couple of points I’d make here. One is that many people think that the best way of increasing profit is to reduce cost. And I kind of see that. If my costs were lower, my profit would be higher. But it’s sort of the finance solution, isn’t it? They’re saying what costs can we get out of the business? And yeah, of course you’ve got to be lean and mean and trading better than your competitors in your sector. But the danger with overcutting on costs is it creates two things. It creates a picture that a buyer might go. I’m not sure I believe these numbers because it suddenly changed a lot from last year. That’s one thing. so, you suddenly reducing your headcount by 10 % to make your profit look higher is beautiful magic wand waving, but people can see through it. The other thing around it is that if you do too much cutting and fiddling around with the P side of it, it can quite often put a business into a negative mindset and some of the key talent starts thinking I might want to be leaving and so on. And one of my phrases that I use quite a lot, one day someone will challenge me with an example, is I say, no one ever grew a business by cutting costs. So I think it’s an area you have to be very careful with, but thinking about it, if we go back to my original example of 1 million profit with a four times multiplier, say, so that’s valuation of 4 million, you could have to increase your profit quite a lot to make a difference compared to adding one more multiplier point, going from four to five or five to six. So actually a lot of the intellectual focus, if it’s looking at the multiplier, you can get much quicker results out of it if you choose to go that way.
Yeah, so it’s like a black box, isn’t it? That how do I get that multiple up? Is it a black art? Is it a science? What’s in there? What do I have to do? It’s not always tangible things. It’s the intangibles you need to work on to increase the multiplier. And I want to get into that and explore that a bit more. But just before we jump onto the multiplier side, just… I think it’s worth noting that when you’re your business chances are you’re selling it to someone bigger than yourself and they’ve got advisors on board and they’ve bought more than one business in the past more often you know quite often they’ve bought more than one business in the past these people know what they’re doing and if they see that your costs have and your finances have been adjusted and they’ve had cost ripped out of them to try and improve the look of the profit they’re smart people they’re onto that real quick you’re not going to calm them and and the other thing that they’ll do is that they’ll just start saying okay.
So you’ve stopped investing and reinvesting in your plant and equipment and your resources, whether that be your culture and the workplace and the people in your business, you’ve stopped reinvesting in them. So it’s time that we need to put in, you if we acquire the business, we’re going to have one of the first things we’re going to have to do is to make some big investments because you’ve stopped investing. So there’s a big risk of just cutting costs and trying to cut your way to growth.
But it’s easy, it’s tangible, mathematically it adds up. So that’s why a lot of people start there, and it’s a good place to get some quick wins. So if you’ve only got six months before you wanna start, before you wanna exit your business or sell your business, and you’ve got six months that you haven’t allowed enough time to plan and prepare your business to be exit ready, then that’s where you’re gonna start, and that’s where you’ll get all your results.
Now, mathematically, let’s have some fun because all that’s boring stuff and entrepreneurs don’t do it because it’s not fun, it’s dry, it sucks a life out of them working on all those areas of their business on governance and compliance and financials and what have you. So let’s have a look at the fun stuff that entrepreneurs like working with, which will really get them out of the day-to-day business side of the business and get them working on their business because they’re now working on the intangibles. these are the things that tend to excite entrepreneurs that work on projects and they’ll really add value to their business by reducing the risk to future buyers, and therefore increasing the the multiplier in the the valuation formula. So what do we mean by that? What do we mean when we say, well…
You’re working on the intangible, so it reduces the risk. Let’s get some into the nitty gritty, we, Kevin, instead of just being generic. What are some of the things we can do from an intangible perspective? And when I say intangible, I just mean it’s not appearing on your balance sheet. It’s not appearing in your P &L directly. So what are the things we’re talking about?
Yeah, and yes, and you’re quite right. Most of these things are off balance sheet. And I like your use of the term risk around these areas. If the risk is lower, the multiplier goes up. But I would also add to that, I think it’s risk and opportunity.
If a new buyer sees risk, they’re gonna devalue the business. If they see opportunity, they’re gonna increase it. And so I think one of the really, for me, if you’re looking at just a kind of a couple of years span, there’s really two areas that for me are the ones you can focus on and achieve great things in just a couple of years. That would be products and channels. But so first of all, product, what’s that about? Well, it’s very simply saying, could I could I create a more valuable business by focusing more on my product? And that means more people buying your product or having more products that people can buy. And I would extend that into how it’s presented, how it’s packaged, how it’s promoted, all those things. it’s so many businesses have relied on the great quality of their product for a decade or more.
And truly stepping back and considering what the marketplace might want or could absorb or consume is not a thing that’s done very often. And for most businesses, if they bothered to spend five hours on an offsite workshop, just looking at where they could go with products.
I pretty much guarantee you that everyone could find a 10 % increase by evolving the existing products, repackaging, representing, or come up with something new that is parallel and associated with what their core strengths are.
So getting as one of the things we love working on is building a product strategy and getting around the strategic side of the business and thinking forward. So you’re going, let’s build a product strategy. what we mean is we go, what’s understanding, we’re moving away from the features of what we do to understanding the problem we solve for clients, right? And problem one is, well, let’s solve the problem for the client. And then if we understand the cost of that problem to the then we can price and package our solution more effectively because it’s meeting their needs. And if we’re a problem, we… and we price and package a solution that works for them and they buy that from us, that’s fantastic, they’ve bought something from us. But we all know it’s far easier to sell something to an existing client. So have we got a strategy that we go, well, here’s the first product, here’s the second product, here’s the third product, here’s the fourth product, or here’s the first, fourth purchase they make from us because by the time they’ve made four purchases from us, their loyalty, their customer retention, regardless of whether it’s a service or a product, sole business goes up from about 50 % to 90%. So I love that thinking, Kevin. So there’s your product. What about the marketing or the marketplace side of things? How do we, how do we?
Really, I mean initially that’s really looking at channels isn’t it and again businesses have become very good with their their products and its gentle evolution and they’ve spent a lot of time looking after specific channels of distribution and specific customers and they’re good strong relationships and let’s imagine the company’s been really good at it and they’re really maximised that what customers can buy well if you’re going to achieve more, you need to look at more channels. Are there other industries that could use the things that you do make or could make? Are there other geographies? Are there other people that could distribute your product rather than doing it yourself that have got their own contact points? And I think this area, the product and the channels, the reason it’s exceptionally interesting for me is that you’ve got to start spending some time looking at it entirely from the customer, the client’s perspective. You’ve got to start championing the challenges they’ve got and go, how can we help them? How can we get that in front of them so it can make their business better? Because at the end of the day, they’re not going to buy it if it doesn’t work for them. So we’ve got to understand what they need and want. And so to some degree, products and channels can go hand in hand because a new product might be dependent on a new channel.
But yeah, it’s taking a fresh look at how things are consumed in the marketplace and other people’s marketplaces. Let’s find areas where the resistance might be less than growing our business the way we’re trying to at the moment.
Yeah. And channels is just marketing speak, isn’t it? How do you access your clients or potential clients who might be interested in the problem you solve? And whether you go through a website or you do some direct emailing or you put content out into the cyberspace and produce a lot of content on social and hope that people respond to your content or events or any various other ways of reaching and addressing that marketplace. That’s what we’re referring to here, isn’t it?
Yes, yeah. And they are exciting areas, but if people have a background that’s more in the manufacturing, the creation of the outputs and so on, not necessarily an easy area to start working in. So occasionally it needs a catalyst to get those conversations going and so a facilitator in a workshop or whatever to start challenging the organisation to think differently and…
And then at the end of it, say, okay, out of all that, what have we got the appetite to do and the potential to be successful in? it’s, you know, having the workshops all very well, you have to come out with a plan to get it to happen. That’s going to be efficient and not jeopardise the businesses they’re already.
And yeah, and you also want to consider the timeframe you’ve got available. How much time will this take to leverage these opportunities and therefore get it to the point where additional cash is coming into the business and therefore boosting the valuation? Because if you’ve got a product stream and you can demonstrate that you’ve now got a product cycle where you’ve got, let’s say, a strategy where you’ve got four purchase options or four products that clients can buy and you can demonstrate a history that clients buy or a percentage of your clients go buy one two three or four of those products from you And you’ve got the reporting to support it a buyer of your business is going to go Hey the risk of that ongoing revenue or the risk of that changing because it’s totally systemised is pretty low so I’m going to pay more for a business like that that sells more than one product to its clients and accesses more than one route to the marketplace and and has several ways of reaching potential clients. That’s a less risky business for me because it’s systematic, it’s structured, it’s planned, it’s coordinated, it’s a deliberate business. So all those things would be why it would boost the on your valuation.
Yeah, I’m just suddenly remembering one of our clients, won’t name them because it’s not right to do so, but one of our Essex based clients and the owner of that business has got magnificent amounts of data about what his customers and channels are doing. And he goes, why have they stopped? He actually had flags up in his systems if a particular channel suddenly dramatically varies their purchase rate on certain elements of the products they supply and he can very quickly get on it and work out why that is. But he ends up, the way it works is he takes a holistic view of what a client will need and he goes, how much of their purchasing of that stuff am I getting? If they’ve suddenly stopped buying that category, they must be buying it from someone else, they need it. So let me ask them what the issue is. And so data and understanding the customers is the key to success on that one.
And so it sounds like you put some good monitoring systems in place there, looking at lead and lag indicators so they could identify these issues quickly rather than after it’s too late.
Yes, and it’s also set up in a way where it can just be interrogated from the point of view of trying to understand more things, know, what if we did that? What if we did that? If that changed, what difference would it make? That’s getting bit more into depth on the whole kind of product and channels bit.
Okay, so we’ve got products and channels that will increase the model player. What about staff and culture? If you’ve got a good culture in the workplace and you can demonstrate that your staff and your team stay with you for a long while and you’ve got low staff turnover and you’ve got great glass door reviews and people are progressing through the business and they’re getting opportunities and challenges and growing personally and professionally. Is having a good culture going to boost things, do think?
Well, the opposite of that is if you didn’t have a good culture, what would happen? Yes, of course it’s gonna do good things. A business is, I always think it is a living breathing entity and growing people through it makes the business strong because you’re keeping lots of knowledge. It’s not going elsewhere. But to make a really healthy business, you…it will vary from company to company and sector to sector. But as you grow, you do need fresh blood from outside to be a proportion, percentage of the hires or promotions that go on in your business, because that helps you challenge your existing approaches, comes up with fresh ideas, keeps you market market wise and so on.
And also a good measure, I mean this is an odd one, people don’t necessarily think like this, but it’s a good measure of how well you’re doing if some of your people that have been with you for five, six, seven years are able to go off and get promoted into a new organisation. It does mean the quality of your people is good if people are after them. So don’t get too upset if people leave. It’s a measure of your success with them.
But at the same time, it’s an opportunity perhaps to hire someone else in you from outside as your competitor may have just done.
Yeah. So one of the things is your recruitment costs are lower because you’re attracting people because you’ve got a strong culture and you have a reputation in the marketplace and people want to come and work for your business. So there’s a value add.
You’ve got people that are staying around and growing and they know your business so they’ve got a lot of knowledge in your business so that adds value because you’ve got great corporate knowledge. Everyone’s aligned to the vision. They know where the business is going. They know the direction of the business. They know the purpose of the business and they feel culturally aligned to that, where the purpose of the business and the values of the business. So when they feel aligned, it enables them to use their initiative when when things aren’t real clear they can make a decision that is aligned to the vision of the business which points the business in the right direction, which just means their decision making is aligned to how the owners might make decisions, which adds value and just becomes a more rewarding place to work. So all these things add up to a culture that adds value to your business. So, there’s a whole lot of tools we can use to amplify that, ladder to equity there’s all sorts of things that we can do to improve that you can do to improve and build the culture of your business.
Yeah, you’re right. And it’s one of those things that again, you can’t do that in six months. You’ve got to start that as a start it today. You know, if you’re listening to this now, focus on it now, because it will make a difference, but it will take a while. It’s which is a bit like the whole culture piece is a bit like brand. And to some extent, the culture is what people decide it is, rather than what you try and impose.
I know you can steer it and we talk about that a lot with our clients and brand to some degree we can decide what our brand is but ultimately the end user, the client or consumer will decide what our brand is and what it stands for. But both of them take a while to do and they are closely associated. How your people behave is how it is partly how your brand is perceived in the marketplace. But the brand is such a powerful thing that
I mean, we’re talking about billions and billions of pounds is the value of the Apple brand on their balance sheet. It’s an absurd amount of money, but it genuinely nowadays is being seen as something you can put on a balance sheet if you’re of enough substance. Because if you’ve got a great brand, it has a material effect on the valuation of the business and the viability and sustainability of it. And it’s a bit like the bit you were saying earlier about product hour where you said if people buy one product, half of them might buy a second one. And if they buy a second one, probably three quarters of them might buy a third one and so on. If people buy into your brand, they will come back to you first before they look at alternative options. I dislike the use of the Apple examples all the time, but Apple could launch a horrible product and they would sell loads of them because some people just buy anything that Apple come out with because the brand is so strong.
Yeah, and in case it wasn’t clear, brand is another area that even SME business owners can work on actively in advance to boost the valuation of their business. If you’ve got a brand reputation in the marketplace, just like you were just explaining and sharing there, Kevin, if you’ve got a reputation in the marketplace where people are coming to your brand, your business, rather than the individuals in your business, then that’s going to boost your valuation. People come and go, but the brand is attached to your business. And yes, the marketplace influences it somewhat, just like culture is. But if you’re working on your culture and working on your brand and your comms out to the marketplace, you’re going to get some value there. But it doesn’t happen overnight.
No, but anyone can start on it today.
Yes.
Again, it’s an area that many people haven’t had the opportunity to work on and it is a specific thing, branding and brand development and creating value out of brands and many businesses will require a bit of support on being clear about where they wanna go with it and making it sit comfortably with the culture of their business and their ambitions.
Yeah, yeah. smaller business, I know we speak to a lot of small business owners and they, when they want to start working on their brand and they’ll create a logo. And you know, there’s so much more to branding than a common font and some colors and a letterhead and a logo on your website. So care to comment on that based on some of your experience?
Yeah, I think a brand is the reasons people talk to you apart from the fact that your product’s there and it’s the cheapest or it’s the most available because your shop’s next door or whatever. It’s what people extol the virtues about your business for. They talk about the fact that everything that comes in that business enables me to do this. They’re always reliable and understand what we need. And it’s all those sorts of things that you want people talking about. ultimately, what does John Lewis say to people? What does McKinsey say? What does Deloitte? And they’re just trustworthy places and they work really hard to make sure they deliver consistently and make it really evident why their secret source, their USPs, are the ones of value to their channel of customers.
And that brings us nicely, I think, well done there, Kevin, brings us nicely into, think, the last big topic that I had on my list to address today around what are one of the intangibles you can work on that will boost the valuation of your business significantly. And that’s a consistent, repeatable, reliable way of doing things. Some people call it systemisation, call it what you like, but it’s what sort of assurance do you have as a business owner that when you say this is the way things are done around here, that they are always done that way around here. Do you have some sort of reporting systems in place that show you that your standard process is your standard way of doing things are actually happening that way. Do you have some sort of review system to update your systems and processes? Because the amount of times we go and have a look at businesses and ask them how they do things, and I ask people why they’re doing it that way, they’ll just go, well, we’ve always done it that way. When I got the job, the person before me said, this is how we do it. And it’s amazing how that’s no longer relevant. So yes, system is a great way to ensure and a consistent way of doing things and reducing mistakes and reducing rework but let’s make sure they’re relevant. Let’s make sure you’re getting the efficiency gains that you could and that you’re not just doing a whole lot of tasks that are no longer required or could be automated.
One of the challenges here is that for many creative entrepreneurs, as you alluded to, Darryl, comes over as a bit dull. the argument is, well, if we have everything processed, highly processed, it will deter our creativity. And I kind of agree.
But sometimes processes are essential. If it’s open heart surgery, you want the processes to be perfect. There should not be any chance of that going wrong. But I think the way I would address the creative entrepreneur on this one is if you can get the internal bodyworks of your business to process correctly and efficiently, it means you know what’s going to happen when you push the accelerator to get it go faster but it also gives you more time and more data to be able to then do the entrepreneurial things to grow. actually getting process right is a way to grow the business and also create sustainable, predictable outcomes for your clients and your balance sheet.
Yeah, and I think it’s a really good point because it’s a common fear that’s raised by business owners is that we’re a creative business. Our people are professional. They know what to do. They’re trained. They’ve got experience. Yeah, so are pilots. And pilots have a checklist that they follow through every single time. Now, we don’t want creative pilots and we don’t want creative brain surgeons.
But we want to know that all of the process they do to get up to the point where they’re actually doing the brain surgery is standard so that they don’t have to think about that. If that’s all driven by process leading up to the key part of their skill is driven by process, it gets them there quicker, it gets them there more reliably and they don’t have to think about it so it’s not taking up gray matter space. That way by the time they get to where they need to do their brain surgery, they’re energetically fresh, they’re mentally fresh, they can focus on what they need to do, they’ve got full cognitive ability to do what they need to do to go, that’s not how I expected. That didn’t show up in the x-ray.
How do I handle that? Okay, well, here’s a workaround. Here’s what I can do. And then, okay, now we need to close up. I’ve stopped the bleeding, what have you. Now I need to close up. Then we go back into process, full process. It’s not about documenting the life out of everything and removing any possible freedom or influence or initiative. It’s about removing the risks and ensuring reliability, ensuring efficiency and minimising rework and mistakes.
Yeah. And so we’ve really covered how value equals profit times multiplier. And we’ve talked about profit activities and why they’re good and bad. And for me personally, anyway, some of the more exciting things are working on the multiplier side, which is product channels, brand, the scale of business and so forth.
Just about all of those require external stimuli to get them going. we use our proprietary tools to get conversations going, et cetera. But all of those things can be started straight away. And some of them will deliver rewards, as we said, you can deliver some success in it inside six months. But most of them, you’re gonna need two, three, four, sometimes five years to get them to happen. But the power of increasing the multiplier from three to four or four to five or three up to six or whatever is just incredible. So it’s really worth the time and effort.
If you get your multiplier from three to six, you just doubled the value of your business. Yep.
And look, it’s important to note, think one of the things that we’ve sort of skirted around is that profit. You know, we talk about lead and lag measures when we’re measuring systems and processes. We want to measure lead processes rather than lag so that we can interfere and we can influence the outcome. more efficiently you’re operating at the lead indicator level, you will get a much better lag outcome. Profit is just an outcome of all of the things that you’re working on that we discuss that will actually influence the multiplier.
So when you’re working on those things that influence the multiple, you’re going to also influence the profit. And it’s not unusual to have significant increases, 30%, 50%, even 100 % on the valuation of your business. If you get all these things right and you allow enough time, if you got six months, tidy up the profits and the reporting and all of your information. If you got a bit more time, you’ll have a whole lot more fun. You’ll work on a whole lot new projects and you’ll significantly increase the valuation of your business.
Wise words.
Thanks, Kevin. Hey, look, I think our time’s come to an end. We’ve covered a lot of ground. As always, a good starting place for you is the Business Sellability Score. If you have a look at the Business Sellability, if you search Google Business Sellability Score, you’ll find it, but it’s at succession.plus.uk. You’ll find it there. We hope to see you soon. Cheers, Kevin.
Yeah, thank you very much. Cheers, Darryl.
About Kevin Harrington
Kevin Harrington- Succession Plus UK Partner
Having worked in technology, telecoms, consumer electronics, payments, media and publishing, Kevin has enjoyed an interesting career history that embraces product and services businesses at all stages of their journey.
Before joining Succession Plus he was CMO with The Panoply plc, a digitally native technology services company, founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses. He joined The Panoply from Tungsten Network where he was Chief Commercial Officer.
Previous roles have included working with SMEs and large international businesses. Some highlights are Managing Director at the Emerging Payments Awards and the Prepaid Awards; Managing Director of Gx; Director of Sodexo Motivation Solutions; Global Marketing Director at BBC Worldwide; Product Group Marketing Manager with Sony UK.
His career started out in a completely different direction. His first two full-time roles were as a junior in an architect’s office and a civil engineering technician. Some of his drawings and designs were constructed and are still standing.
If you would like to learn more about how to start preparing your business, then you can get more information here: https://page.succession.plus/it-all-begins-with-insights-exit-insights
Get started by knowing how sellable your business is right now. Check out our Business Sellability Scorecard to find out.
