You spent twenty years building this business. You reinvested the profits. You paid yourself less than the market for a decade so the company could grow. You built a team, earned customer loyalty, and created something that runs without you being in every room. The number in your head reflects all of that. It should.
A buyer doesn't care about any of it.
This is not cynicism. It is arithmetic. A strategic acquirer or a private equity fund looks at one thing first: what does this business earn, reliably, after we adjust for everything the owner did to make the P&L look the way it does? That number — normalised EBITDA — is almost always different from what appears in your accounts. Sometimes dramatically so.
The adjustments go both ways. If you paid yourself CHF 400,000 per year and a market-rate CEO would cost CHF 180,000, a buyer adds back CHF 220,000 to your earnings. That is positive. But if your three largest customers represent 60% of revenue, a buyer applies a risk discount to every multiple they consider. That is negative — and it compounds.
The multiple — and why it matters more than anything else
The multiple itself — the number a buyer applies to your normalised EBITDA to arrive at an enterprise value — is not fixed. It moves with sector, size, growth rate, customer concentration, management dependency, and market conditions.
In Southern European SME transactions, multiples typically range between 4× and 8× EBITDA for businesses in the CHF 2–15M range.
The difference between 4× and 8× on CHF 1M of normalised EBITDA is CHF 4 million.
That is not a rounding error. That is the gap between a life-changing outcome and a disappointing one.
Three things that move you from 4× to 8×
Revenue visibility. Recurring contracts, long-term agreements, and low customer churn give a buyer confidence in the earnings stream they are acquiring. A business with 80% recurring revenue trades at a fundamentally different multiple than one that re-sells its entire customer base every year.
Management depth. If the business cannot run without you for six months, a buyer prices that dependency into the multiple — or structures it out through an earn-out that keeps you working for them for two years after the sale. Neither outcome is what you want.
Clean financials. Not perfect — clean. A buyer who finds surprises in due diligence does not renegotiate. They walk. The issues that kill deals in DD are almost always visible 18 months before going to market. If you know what they are, you can fix them. If you don't, you find out too late.
What to do today
Regardless of whether you plan to sell in one year or five, commission an independent normalisation of your EBITDA. Not from your accountant who files your taxes. From someone who thinks like a buyer.
The number will surprise you. Use it to decide what to fix before you go to market — not after.
M&A Intelligence is a weekly briefing written from the buy side. No broker mandate. No conflict of interest. Just what buyers actually look for — and what sellers almost never know.
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