Most founders carry a number in their head before we ever speak. It usually comes from a rule of thumb, a competitor who sold, or a multiple someone quoted once at a conference. And it is usually wrong, sometimes by a wide margin, in one direction or the other.
Across 79 engagements since 2020, the businesses we've taken to market have priced at an average of 2.76x revenue and 7.71x profit. That's a useful benchmark, but the average hides the part that matters, which is how wide the spread around it runs. Two businesses of similar size can sell years of work apart in value, one at 3x revenue and another at 6x. Founders almost always assume the gap is growth. It rarely is.
What actually moves the number comes down to a handful of things, and most have little to do with how fast you're growing.
Retention
A business that keeps 95% of its revenue year after year is worth considerably more than one growing quickly but losing customers out the back. A buyer is underwriting the revenue that stays, not the revenue that arrived this quarter.
Revenue quality
Recurring and contracted revenue prices well above project or one-off work. To an acquirer, predictable income is simply worth more than a larger but lumpier number.
Owner dependence
This is the most common discount we see. If the business slows when you step away for two weeks, that shows up in diligence and it shows up in the offer. It's also among the most fixable, given enough runway.
Margins and the balance sheet
Profitability and a clean balance sheet decide which buyers can credibly bid at all, and how hard they push once they're at the table. Debt and thin margins quietly narrow the field.
Evidence under pressure
A traffic spike the business absorbed, an anchor client it lost and replaced, a downturn it came through without a bad year. Each of those removes a line of risk from a buyer's model, and risk is what discounts a price.
One distinction that catches founders out
Most quote their business on revenue. Buyers, and private equity in particular, are usually buying earnings, and the earnings figure they use is rarely the one on your P&L. It gets adjusted: below-market owner pay is normalised, personal expenses are stripped out, one-off costs are added back. Getting that adjusted number right is often worth more than anything else you do before going to market.
The encouraging part is that almost none of this is fixed. Most of it is addressable in the twelve months before a sale, which is exactly why the founders who start early tend to do better than the ones who wait for an offer to land in the inbox.