Private Equity Growth Blackbook

The Private Equity Growth Blackbook

The strategic growth playbooks institutional buyers use to multiply a company’s value, modified for independent owners

Read This First

This little book is about one thing.

How the professionals grow the value of a company. And how you can do the same thing, without their money, their staff, or their spreadsheets.

I worked in private equity. I looked at small-business valuations from both sides of the table. Sometimes I was helping the seller. Sometimes I was helping the buyer.

Here is what I saw over and over.

Most of the deals I watched died. Almost all of them. And it was rarely because the business was bad. It was because the owner didn’t know what the company was really worth. They had problems they didn’t know about. And when they did know, they didn’t know how to fix them.

The buyers knew. The buyers always knew.

Private equity firms have a set of plays they run on almost every company they buy. They are not secret because they are hard. They are secret because nobody bothers to explain them to owners.

This booklet explains them.

Each playbook gives you five things:

  1. What it is. The play, in plain English.
  2. Why buyers pay more for it. The reason it raises your price.
  3. Your 90-day run. How an independent owner can do it in about three months.
  4. A checklist. So you can track it.
  5. A hypothetical example. Made-up numbers, clearly labeled, so you can see the math. Real results vary. Your industry, size and market all change the numbers.

You do not need to run all fifteen. Pick one or two. Run them well. Then pick the next one.

At the end, you’ll find a one-page 12-month plan. Use it.

One more thing. Some of these plays touch legal, tax and financial questions. I’ll explain the general ideas. Your CPA and your attorney should confirm the specifics for your company before you act.

Let’s get started.

How Private Equity Thinks: Buy, Build, Sell

Private equity (PE) is money from investors that a firm uses to buy private companies. The firm’s job is simple. Buy a company. Make it worth more. Sell it.

That’s it. Buy, build, sell.

Most PE firms plan to own a company for about three to seven years. From the first day, they are thinking about the day they sell. Every decision gets one test:

“Will this make the company worth more to the next buyer?”

Most owners don’t think this way. Most owners think, “Will this make me more money this year?”

Those are two very different questions. And the gap between them is where a lot of money hides.

The two numbers that set your price

When a buyer prices a small business, they mostly look at two things.

Number one: your profit. Buyers usually use one of two profit numbers.

  • SDE (Seller’s Discretionary Earnings): your profit plus what you pay yourself, plus personal or one-time costs run through the business. Used mostly for smaller companies.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): your operating profit before a few accounting and financing items. Used mostly for bigger companies.

Number two: your multiple. This is how many years of profit a buyer will pay for your company.

Your price is roughly profit times multiple.

Small businesses often trade somewhere around 2 to 5 times SDE, or 3 to 7 times EBITDA. It depends a lot on size, industry, growth and risk. Those ranges vary widely, so treat them as a rough guide, not a promise.

Why this matters so much

Here is the part most owners miss.

When you add one dollar of profit, you don’t add one dollar of value. You add one dollar times your multiple.

At a 4x multiple, every extra dollar of yearly profit can add about four dollars to your price.

And when you make your company less risky, the multiple itself can go up. Now every dollar of profit is worth more.

PE firms push both levers at once. More profit. Higher multiple. That’s how they multiply value.

The three questions every buyer asks

Behind every multiple are three questions. Every playbook in this book answers at least one of them.

  1. Will the money keep coming? (Recurring revenue, customer spread, contracts.)
  2. Can it grow? (Pricing room, new markets, new products, a marketing engine.)
  3. Does it run without the owner? (Managers, systems, numbers.)

The more confident a buyer feels on all three, the more they pay.

How to use the playbooks

The fifteen playbooks are grouped into four parts:

  • Part One: Grow Profit Fast. Pricing, tiers, recurring revenue, cross-sell.
  • Part Two: Grow the Top Line. Marketing engine, new territory, add-on acquisitions.
  • Part Three: Lower the Risk. Customer concentration, management, owner independence, KPI dashboard.
  • Part Four: Tighten the Machine. Working capital, procurement, cost-out, and how multiple arbitrage works.

Do this today: Write down your last full year of revenue and your best guess at SDE or EBITDA. If you don’t know, that’s your first job. You can’t grow what you don’t measure.

Part One: Grow Profit Fast

Playbook: The Price Increase

What it is

You raise your prices. On purpose. With a plan.

It sounds too simple. But in PE, pricing is often one of the first things a firm looks at after it buys a company. Why? Because it’s usually the fastest way to grow profit.

Many owners haven’t raised prices in years. They are afraid of losing customers. So they eat rising costs instead. Their margin shrinks a little every year, and they don’t notice.

Why buyers pay more for it

A price increase drops almost straight to profit. Your costs don’t go up when your price goes up. So most of that new money is profit.

More profit times your multiple means a higher price for your company.

There’s a second reason. A business that can raise prices and keep its customers has what buyers call “pricing power.” It shows customers value what you do. That makes buyers feel safer.

Your 90-day run

Days 1–15: Know where you stand. - Pull your price list. When did each price last change? - Check what three to five competitors charge. Call them if you have to. - List your costs that went up in the last two years: wages, parts, fuel, insurance, rent.

Days 16–30: Pick your plan. - Decide on an increase. Many owners start modest and test. - Decide who gets it first. New customers are the easiest place to start. They never saw your old price. - Decide what you will NOT raise. Maybe your top few loyal accounts get a later date.

Days 31–60: Roll it out. - New price for all new quotes and new customers starting on a set date. - Write a short, honest letter for existing customers. Give 30 days’ notice. Thank them. Explain costs went up. Don’t apologize too much. - Train your team on what to say if someone asks.

Days 61–90: Watch and learn. - Track: How many customers left? How many quotes did you win? Did average job size change? - If almost nobody pushed back, that’s a sign you may still be priced low.

Checklist

Common mistakes

  • Raising prices only once a decade. Small, regular increases are easier for customers to accept than one big jump after years of nothing.
  • Apologizing too much. A long, nervous letter invites pushback. Keep it short, warm and clear.
  • Letting salespeople discount it away. If your team gives the old price to anyone who asks, you didn’t raise prices. Set rules for discounts.
  • Not tracking results. If you don’t measure who left and who stayed, you’ll never know how far you can go next time.

Hypothetical example (made-up numbers)

Imagine an HVAC company doing $3,000,000 a year in revenue with a 15% EBITDA margin. That’s $450,000 in EBITDA.

The owner raises prices 5%. Say almost every customer stays. Revenue goes up about $150,000. Costs barely move. So most of that $150,000 becomes profit.

EBITDA goes from about $450,000 to about $600,000.

If a buyer pays 4x EBITDA, the value goes from about $1,800,000 to about $2,400,000. That’s roughly $600,000 more, from one decision.

Real life is messier. Some customers will leave. Some costs will move. But you can see why PE firms look here first.

Do this today: Find the date of your last price increase. Write it here: ____________

Playbook: Good, Better, Best Pricing Tiers

What it is

Instead of one price, you offer three choices.

  • Good: the basic version.
  • Better: the version most people should buy.
  • Best: the premium version with everything.

A plumbing company might offer a basic repair, a repair plus a one-year warranty, and a repair plus a warranty plus a full system check. An agency might offer three package sizes.

Why buyers pay more for it

Tiers often raise your average sale. Many customers skip the cheapest option. Some pick the best one. You were leaving that money on the table with a single price.

Tiers also show a buyer you have a real sales system, not just a guy writing numbers on a napkin. Buyers like systems. Systems can be copied and grown.

Your 90-day run

Days 1–20: Study what you sell now. - List your top five products or services. - For each, ask: What could I take out to make a cheaper version? What could I add to make a premium version? - Look at what extras customers already ask for.

Days 21–40: Build the tiers. - Pick ONE product or service to start. - Build three options. Make the middle one the one you want most people to buy. - Price the gaps so the middle feels like the smart deal. - Write each tier on one page in plain words.

Days 41–75: Test it. - Train your salespeople or techs to always present all three. - Present the best option first, then the others. Let the customer choose. - Track which tier each customer picks.

Days 76–90: Tune it. - If almost everyone picks Good, your Better may be priced too high or not clear enough. - If many pick Best, you may be underpriced at the top. - Roll the winning setup to your next product.

Checklist

Hypothetical example (made-up numbers)

Imagine a landscaping company with an average job of $1,000. They add three tiers: $900, $1,200 and $1,800.

Over a few months, say the mix lands at 30% Good, 50% Better, 20% Best. The new average job is about $1,230. That’s about 23% more per job, with the same number of customers.

Your mix will be different. The point is the math. A small shift in what each customer buys can move profit a lot.

Do this today: Pick one service. Write what a Best version would include: ____________

Playbook: Recurring Revenue Conversion

What it is

You turn one-time sales into repeat sales that happen on a schedule.

Think maintenance plans, service agreements, memberships, retainers, subscriptions, or yearly contracts.

An HVAC company sells a yearly maintenance plan. An accounting firm moves clients to a monthly fee. An agency moves clients from project work to a monthly retainer.

Why buyers pay more for it

This is one of the biggest value levers there is.

Recurring revenue is money you can predict. A buyer can look at it and say, “That money will very likely still be here next year.” Predictable money is less risky. Less risk means a higher multiple.

Two businesses can have the same profit and sell for very different prices. Often the difference is how much of that profit repeats.

Dana Whitfield, an agency founder, shifted to recurring retainers in under 9 months. In her words: “Buyers doubled their multiple offer.” Your results will depend on your business, but this is the kind of change buyers notice.

Your 90-day run

Days 1–15: Find the repeat need. - What do customers need again and again? Tune-ups? Reports? Updates? Supplies? Check-ins? - Which customers already buy from you two or more times a year? Those are your best first targets.

Days 16–35: Design the plan. - Build one simple plan. Name it. Give it a monthly or yearly price. - Include something customers value: priority scheduling, a discount on repairs, a set number of hours, a yearly check. - Put it in writing with clear terms. Have your attorney review the agreement. - Set up automatic billing if you can.

Days 36–75: Sell it. - Offer it at every job, every invoice, every renewal. - Call your repeat customers first. They are the easiest yes. - Give your team a small reward for each plan sold, if that fits your business.

Days 76–90: Measure it. - Count members. Track how much revenue is now recurring. - Track who cancels and why. - Write down your goal for recurring revenue as a percent of total.

Checklist

Common mistakes

  • Making the plan too complicated. If your team can’t explain it in one sentence, customers won’t buy it.
  • Giving away too much. The plan should be worth more than it costs the customer, but it still needs to make you money. Do the math on what each member costs you to serve.
  • Selling it once and forgetting it. Plans need renewals, reminders and follow-up. Cancellations quietly add up if nobody is watching.
  • Calling it recurring when it isn’t. A buyer will check. Only count revenue that comes from a written agreement or a true repeating schedule.

Hypothetical example (made-up numbers)

Imagine a plumbing company with 2,000 past customers. They launch a $20-a-month plan with a yearly check-up and priority service. Over a year, say 300 customers join.

That’s 300 × $20 × 12 = $72,000 a year in recurring revenue. Plus those members tend to call you first when something breaks.

The bigger win is how a buyer sees it. Now part of the business repeats every month. That piece is easier to trust, and easier to pay up for.

Do this today: Count how many customers bought from you more than once last year. Write it here: ____________

Playbook: Cross-Sell and Upsell

What it is

You sell more to the customers you already have.

  • Cross-sell: selling them something different. (You fixed their AC. Now you sell them a water heater.)
  • Upsell: selling them a bigger or better version. (They wanted a repair. You offer a full replacement with a warranty.)

Why buyers pay more for it

It costs a lot to win a new customer. It usually costs much less to sell to one who already trusts you. So cross-selling often has high profit.

It also makes customers stickier. A customer who buys three things from you is much less likely to leave than one who buys one thing. Stickier customers mean more predictable revenue. Buyers like that.

And it tells a buyer there’s more room to grow inside the customer list they’re buying.

Your 90-day run

Days 1–15: Map what customers buy. - Pull a list of your customers and what each one bought last year. - How many buy just one thing? How many buy two or more? - List everything you sell. Which things naturally go together?

Days 16–30: Build simple offers. - Create two or three “next step” offers. Example: “Customers who buy X usually need Y.” - Write a short script for your team. One or two sentences. Helpful, not pushy.

Days 31–75: Put it in front of customers. - Add the offer to invoices, follow-up emails and job wrap-ups. - Train your techs or account managers to mention it on every visit. - Reach out to your top 50 single-product customers with a personal offer.

Days 76–90: Measure. - Track the percent of customers who now buy two or more things. - Track revenue per customer before and after.

Checklist

Hypothetical example (made-up numbers)

Imagine a commercial cleaning company with 100 clients, each paying $2,000 a month for office cleaning. That’s $2,400,000 a year.

They start offering monthly window and carpet service at $300 a month. Say 25 clients add it. That’s 25 × $300 × 12 = $90,000 more a year, with no new clients and no new marketing spend.

Do this today: Write the one product your customers most often need next: ____________

Part Two: Grow the Top Line

Playbook: The Digital Marketing Engine

What it is

You build a system that brings in new leads every month, on its own, without depending on you or on word of mouth alone.

A marketing engine usually has a few simple parts:

  1. A place people find you. Search results, maps listings, ads, social media, referral partners.
  2. A reason to contact you. A clear offer on a simple web page.
  3. A way to follow up. Calls, emails or texts that go out on a schedule.
  4. A way to measure. You know where each lead came from and what it cost.

Why buyers pay more for it

Many small businesses grow mostly through the owner’s relationships and referrals. That’s great, until the owner leaves. Then the buyer worries the leads will leave too.

A marketing engine shows a buyer that customers come from a system, not from one person. The buyer can see it, measure it, and often turn it up with more budget.

When you can say, “We spend $X a month and it brings in Y leads,” a buyer can do the math on growth. That’s a lot more convincing than “People just know us.”

Your 90-day run

Days 1–15: Find out where leads come from now. - For every new customer in the last 90 days, write down how they found you. - If you don’t know, start asking every new customer starting today.

Days 16–30: Fix the basics. - Claim and update your free business listings on the big search and map sites. - Make sure your website has a clear phone number, a clear offer and a simple contact form. - Ask your happiest customers for online reviews.

Days 31–60: Add one paid channel. - Pick one. Search ads are often a good start for service businesses because people are already looking. - Set a small monthly budget you’re comfortable testing. - Use a tracking phone number or form so you know which leads came from it.

Days 61–90: Follow up and measure. - Set up a simple follow-up: call within the hour, text the same day, email the next day. - Track each lead from first contact to sale. - Figure out your cost per lead and cost per customer.

Checklist

Hypothetical example (made-up numbers)

Imagine a roofing company that spends $3,000 a month on search ads. Those ads bring in 40 leads. The team closes 8 of them. Average job: $10,000.

That’s $80,000 in sales a month from $3,000 in ads. Profit on those jobs depends on margins, but the buyer now sees a machine: money in, customers out, and a clear dial to turn up.

Your numbers will be different, and some months will be better than others. Track them anyway. A measured engine is worth more than an unmeasured one.

Do this today: Ask the next five new customers, “How did you hear about us?” Write the answers down.

Playbook: Geographic Expansion

What it is

You take what already works and offer it in a new area.

That could mean a new town, a new county, a second location, or simply serving a wider radius from your current shop. For some companies, it means selling online or to a new region by phone.

Why buyers pay more for it

Buyers pay for the future, not just the past. If your business only serves one small area, a buyer may wonder how much more it can grow.

When you prove your model works in a second market, you show it can be copied. That makes your growth story believable. A believable growth story supports a higher multiple.

It also spreads risk. If one local economy slows down, the other may hold steady.

Your 90-day run

Days 1–20: Pick the target. - Look at your customer map. Where do you already get some customers from outside your main area? - Pick ONE nearby area that’s similar to your best market. - Check the competition there.

Days 21–40: Plan it lean. - Can you serve it from your current location first, with longer drive times? - What would you need? One more truck? One more tech? A local phone number? - Check licensing, permits and insurance for the new area with your attorney and agent. - Set a budget and a “stop” point if it isn’t working.

Days 41–80: Launch. - Run your marketing engine in the new area. - Ask current customers for referrals to friends and family there. - Assign one person to own results in the new area.

Days 81–90: Measure. - Track leads, jobs, revenue and profit from the new area separately. - Decide: keep going, adjust, or stop.

Checklist

Hypothetical example (made-up numbers)

Imagine an electrical contractor doing $2,000,000 a year in one county. They start serving the next county over with one extra van and one tech. In the first year, say the new area brings in $300,000 in revenue.

Even more valuable: the owner can now show a buyer, “We did this once. Here’s the plan to do it three more times.” That’s a growth story with proof behind it.

Do this today: Circle the one nearby area you’d most like to serve next. Write it here: ____________

Playbook: Add-On Acquisitions (Buy-and-Build)

What it is

You buy smaller companies and fold them into yours.

In PE, this is called “buy-and-build.” The first company a firm buys is the “platform.” The smaller companies it buys later are “add-ons.”

An independent owner can do a version of this too. You might buy a retiring competitor’s customer list, a small shop in the next town, or a company that offers a service you don’t.

Why buyers pay more for it

Three reasons.

First, you get bigger fast. Bigger companies usually sell for higher multiples. (More on that in the Multiple Arbitrage playbook.)

Second, small companies often sell for lower multiples than bigger ones. So you may be buying profit at a lower price than what that profit is worth once it’s part of your larger company.

Third, combined companies can often cut double costs. One office instead of two. One set of software. Better buying power.

A word of caution

This is the most advanced playbook in this book. It involves debt, legal agreements, taxes and real risk. Bad acquisitions can hurt a good company. Work with your CPA, your attorney and, ideally, an advisor who has done deals before. Go slow.

Your 90-day run

This 90-day run is about getting ready and finding targets. Closing a deal often takes longer.

Days 1–20: Get your house in order. - Clean up your own books. You need to know your numbers before you buy someone else’s. - Decide what kind of add-on fits: same service in a new area, a new service for the same customers, or a customer list. - Talk to your banker about what kind of financing might be possible.

Days 21–50: Build a target list. - List 20 to 30 smaller companies in your area or industry. - Focus on owners who might be near retirement. - Learn what each one does and roughly how big they are.

Days 51–80: Start conversations. - Reach out personally. A friendly call or letter: “If you ever think about what’s next, I’d love to talk.” - Many owners have no exit plan. You may be the answer they’ve been looking for. - Don’t talk price yet. Build trust.

Days 81–90: Pick your best one or two. - Get basic numbers from interested owners, under a signed confidentiality agreement. - Bring in your CPA and attorney before making any offer.

Checklist

Common mistakes

  • Buying a company because it’s cheap. A low price can mean hidden problems. Look hard at why it’s for sale.
  • Skipping the homework. Buyers do “due diligence,” a deep check of the books, contracts, customers and legal issues, before they close. You should too.
  • Taking on more debt than the combined company can carry. If a slow year would put you in danger, the deal is too big.
  • Forgetting the people. The customers and employees of the company you buy are the real asset. Plan how you’ll keep them.

Hypothetical example (made-up numbers)

Imagine a pest control company with $800,000 in EBITDA. They buy a small competitor with $200,000 in EBITDA, paying 3x, or $600,000.

After combining, they cut some double costs. Say the combined EBITDA is $1,050,000.

If the bigger combined company later sells at 5x, it’s worth about $5,250,000. Before the add-on, at the same 5x, the original company would have been worth about $4,000,000.

That’s the idea. Real deals carry real risk, debt and costs. Multiples are not guaranteed to rise. But you can see why PE firms love this play.

Do this today: Write the names of three smaller companies you’d consider buying someday: ____________

Part Three: Lower the Risk

Playbook: The Customer Concentration Fix

What it is

You make sure no single customer, or small group of customers, makes up too much of your revenue.

“Customer concentration” means a big chunk of your revenue comes from only a few customers. A common rule of thumb buyers use: if any one customer is more than about 10% to 20% of revenue, they get nervous. The exact line varies by buyer and industry.

Why buyers pay more for it

Picture this from the buyer’s chair.

They’re about to pay you millions. Then they see one customer is 35% of your revenue. What if that customer leaves after the sale? A third of the business walks out the door.

Buyers handle that risk in a few ways. They lower the price. They hold back part of the price and pay it later only if the customer stays. Or they walk away.

Spreading your revenue across more customers removes that worry. Less worry means a better offer.

Your 90-day run

Days 1–10: Measure it. - List every customer and their revenue for the last 12 months. - Sort from biggest to smallest. - Calculate each customer’s percent of total. Also calculate your top five combined.

Days 11–30: Protect the big ones. - For your biggest customers, put agreements in writing where you can. Longer terms help. - Build relationships deeper than you. Make sure your team knows their team. - Make sure the relationship doesn’t depend only on you.

Days 31–90: Grow everyone else. - Point your marketing engine at more mid-sized customers. - Use cross-sell to grow smaller accounts. - Set a target: “No customer over ____% within 24 months.”

Note: You fix concentration mostly by growing other customers, not by shrinking your big ones. Don’t fire a good customer to fix a ratio.

Checklist

Hypothetical example (made-up numbers)

Imagine a machine shop doing $4,000,000 a year. One customer is $1,600,000 of that. That’s 40%.

Over two years, the shop keeps that customer and adds $2,000,000 from new customers. Now revenue is $6,000,000, and the big customer is about 27%. Still high, but a big improvement. And the company is bigger too.

Do this today: Find your largest customer’s percent of revenue. Write it here: ____________%

Playbook: Professionalize Management

What it is

You build a team of leaders who can run the main parts of the business without you.

In many small companies, everything runs through the owner. Sales, hiring, pricing, problems, big customers. The owner is the CEO, the sales manager, the ops manager and the help desk.

Professionalizing means putting the right people in the right seats, with clear jobs, clear goals and real authority.

Why buyers pay more for it

Most buyers don’t want to buy a job. They want to buy a business.

If the company only works because you’re there, then what is the buyer really buying? When you leave, the value may leave with you.

A strong team tells a buyer, “This will keep running after the owner leaves.” That lowers risk and supports a higher multiple. PE firms often spend a lot of time and money building the management team right after they buy a company, because they know the next buyer will look at it closely.

Your 90-day run

Days 1–15: Draw the chart. - Draw your company’s org chart as it really is today. - Put your name in every box you actually fill. Be honest. - Count your boxes.

Days 16–30: Pick the seats. - Most small companies need a few key seats: someone leading operations, someone leading sales, and someone handling the money. - For each seat, write one page: what this person owns, what decisions they can make, and the two or three numbers they’re judged on.

Days 31–75: Fill and hand off. - Look inside first. Who on your team could grow into a seat? - Hire from outside only where you have to. - Hand off one area at a time. Give real authority, not just tasks. - Meet weekly with each leader. Review their numbers.

Days 76–90: Step back. - Let them make decisions you would have made. Let them make some mistakes. - Track how many decisions still come to you each week.

Checklist

Hypothetical example (made-up numbers)

Imagine a $5,000,000 HVAC company where the owner runs sales and operations. They promote their best senior tech to operations manager and hire an experienced sales manager.

Payroll goes up, so profit dips a little at first. But now the owner can show a buyer a real team. A buyer may see less risk and offer a better multiple, which can more than make up for the extra salary. Whether that happens depends on the buyer and the market, so think of this as a bet on value, not a sure thing.

Do this today: Count how many boxes on your org chart have your name. Write it here: ____________

Playbook: Owner Independence

What it is

You make the business able to run for weeks, then months, without you.

This goes beyond management. It covers every place where you are the key: customer relationships, vendor deals, passwords, know-how, the bank, the license, the phone number that rings in your pocket.

Why buyers pay more for it

Owner dependence is one of the most common reasons small businesses sell for less, or don’t sell at all.

When a buyer sees that the owner holds the relationships, the know-how and the keys, they worry. They may lower the price. They may ask you to stay for years after closing. They may tie part of your payment to how the business does after you leave. That’s called an “earnout,” a part of the price paid later only if certain goals are hit.

The more independent your business is, the more of your money you may get at closing, and the sooner you may be free.

Your 90-day run

Days 1–15: Find your fingerprints. - For one week, write down everything you do and every question people bring you. - At the end of the week, sort the list. What could only you do? What could someone else do with training?

Days 16–45: Write it down. - For your most common tasks, write simple step-by-step instructions. These are called SOPs, or standard operating procedures. - Store all passwords, accounts and vendor info in one secure place your leaders can access. - Record short videos of yourself doing key tasks.

Days 46–75: Hand off relationships. - Introduce your key customers and vendors to the team members who will own them. - Bring that person to meetings. Then let them lead the meetings.

Days 76–90: Take a test vacation. - Take at least one full week off. No calls unless something is truly urgent. - When you come back, write down what broke. Fix those things next.

Checklist

Common mistakes

  • Writing SOPs nobody uses. Keep them short. Store them where the team works. Update them when the process changes.
  • Handing off tasks but not decisions. If every choice still comes back to you, nothing has really changed.
  • Waiting until the sale to start. Buyers want to see that the business already runs without you, not hear that it could someday.
  • Keeping the bank, the licenses and the key accounts only in your name. Talk to your attorney and CPA about what should change, and when.

Hypothetical example (made-up numbers)

Imagine a $2,500,000 marketing agency where the founder holds every client relationship. A buyer looks at it and offers a lower price, with a big chunk tied to an earnout over three years.

Now imagine the same agency after the founder spends a year handing off clients to account leads, writing SOPs, and taking a month off without any problems. A buyer sees much less risk. The offer may include more cash at closing and a shorter transition.

Same revenue. Same profit. Different deal.

Do this today: Pick a week this year for your test vacation. Write the dates here: ____________

Playbook: The KPI Dashboard

What it is

A KPI is a Key Performance Indicator. It’s a number that tells you how a part of your business is doing.

A KPI dashboard is one page with your most important numbers on it. You look at it every week.

Most good dashboards for small businesses have between 5 and 15 numbers. Not 50.

Why buyers pay more for it

When a buyer looks at your company, they will ask a lot of questions. “What’s your close rate? How long do customers stay? What’s your average job size? What’s your gross margin by service?”

If you can answer in seconds, with clean history, the buyer trusts you more. Trust speeds up a deal and makes it more likely to close.

If you can’t answer, the buyer assumes the worst. Or they dig and dig until the deal gets tired and dies. I watched that happen many times.

Also, a dashboard helps you grow. You can’t fix what you don’t see.

Your 90-day run

Days 1–15: Choose your numbers. Pick a few from each group. - Sales: leads, close rate, average sale, revenue. - Customers: new customers, lost customers, recurring revenue, top customer percent. - Operations: jobs completed, on-time rate, callbacks or rework. - Money: gross margin, cash in bank, money owed to you, money you owe. - People: headcount, turnover, revenue per employee.

Days 16–30: Build it simple. - Start with a spreadsheet. One row per week. One column per number. - Decide who reports each number and by what day.

Days 31–90: Use it every week. - Hold a 30-minute weekly meeting with your leaders. Walk through the numbers. - When a number is off, ask why and decide one action. - After 12 weeks, you’ll have three months of history. That’s the start of a story a buyer can see.

Checklist

Hypothetical example (made-up numbers)

Imagine a plumbing company that starts a weekly dashboard. In week four, they see their close rate on water heater quotes is 20%, while their other services close around 45%.

They dig in. Their water heater price is well above local competitors, and the quotes go out two days late. They fix the speed first. Over the next two months, say the close rate climbs to 35%.

Without the dashboard, they would never have seen it.

Do this today: Write the three numbers you’d most want to know every Monday morning: ____________

This is exactly the kind of tracking Valuexus is built to do for you, so you can see your numbers and your value move together.

Part Four: Tighten the Machine

Playbook: Working Capital

What it is

Working capital is the money tied up in running your business day to day.

In simple terms, it’s what customers owe you, plus the inventory you hold, minus what you owe your vendors.

Three numbers matter most:

  • Receivables: money customers owe you. The longer they take to pay, the more cash is stuck.
  • Inventory: stuff on your shelves. Every part sitting there is cash you can’t use.
  • Payables: money you owe vendors. Paying on fair terms, not early, keeps cash in your account longer.

Why buyers pay more for it

Working capital matters in two ways.

First, it frees cash. When customers pay faster and you hold less inventory, cash comes back into your bank account. That cash can pay down debt or fund growth.

Second, it shows up in the deal. Most deals set a “working capital target,” often called a peg. It’s the normal amount of working capital the buyer expects to be left in the business at closing. If you have less than normal, your price may go down. If your working capital jumps around a lot, the negotiation gets harder.

A business with tight, steady working capital is easier to buy. Your CPA can help you understand how this would work in your situation.

Your 90-day run

Days 1–15: Measure it. - Pull your list of who owes you money and how old each bill is (30, 60, 90+ days). - Pull your inventory list. What hasn’t moved in six months? - Look at your vendor terms. Are you paying early when you don’t need to?

Days 16–45: Speed up cash in. - Send invoices the same day the job is done. - Take card or online payments. - Ask for deposits on big jobs. - Call every account over 60 days. Set payment plans if needed. - Tighten terms for new customers.

Days 46–75: Slim inventory. - Sell, return or write off old stock with your CPA’s guidance. - Set reorder points so you only buy what you need.

Days 76–90: Use fair vendor terms. - Pay on the due date, not before, unless there’s an early-pay discount worth taking. - Ask key vendors for better terms.

Checklist

Hypothetical example (made-up numbers)

Imagine a distribution company with $6,000,000 in yearly revenue. Customers take about 60 days to pay on average.

That means roughly $1,000,000 is out in unpaid bills at any time. If they get customers paying in 45 days instead, about $250,000 less is tied up. That’s about $250,000 of cash back in their bank account.

That’s cash they can use, instead of borrowing it.

Do this today: Add up how much customers owe you that is more than 60 days old. Write it here: $____________

Playbook: Procurement Savings

What it is

Procurement means buying. This playbook is about paying less for what you buy, without getting worse stuff.

PE firms often review every major supplier after they buy a company. Many owners have used the same vendors for years and never asked for a better price.

Why buyers pay more for it

Every dollar you save on what you buy goes straight to profit. And profit times your multiple is your value.

It also shows a buyer you manage your costs. Buyers like owners who don’t leave money lying around.

Your 90-day run

Days 1–15: Find your spend. - Pull every vendor you paid in the last 12 months. - Sort by total spent, biggest to smallest. - Your top 10 to 20 vendors are usually most of your spend. Start there.

Days 16–45: Get competing quotes. - For each big vendor, get at least two other quotes. - Look at materials, parts, fuel, insurance, phones, software, waste, uniforms, shipping. - Check for software and subscriptions nobody uses.

Days 46–75: Negotiate. - Go back to your current vendors. Be honest: “I have another quote. Can you match or beat it?” - Ask for volume discounts, early-pay discounts or longer terms. - Consider joining a buying group if your industry has one.

Days 76–90: Lock it in. - Put new prices in writing. - Set a calendar reminder to review your top vendors every year.

Checklist

Hypothetical example (made-up numbers)

Imagine a landscaping company that spends $1,200,000 a year with outside vendors. After shopping and negotiating, they save 4% across their top vendors. That’s $48,000 a year.

At a 4x multiple, that’s roughly $192,000 of added value, just from asking.

Do this today: Name your three biggest vendors by spend: ____________

Playbook: Cost-Out

What it is

“Cost-out” is PE talk for removing costs that don’t help the business grow or serve customers.

This is not about slashing everything. It’s not about cutting the people and tools that make you great. It’s about finding the waste.

It also includes cleaning up your books so your true profit shows. Many owners run personal costs through the business. That’s often legal and common, but it hides your real profit from buyers unless it’s clearly documented. These are called “add-backs” when a buyer adjusts for them. Your CPA can help you sort which ones are appropriate.

Why buyers pay more for it

Two reasons.

First, less waste means more profit. More profit means more value.

Second, clean books build trust. When your profit is easy to see and easy to prove, buyers believe it. When it’s buried under a pile of personal and one-time costs, buyers get suspicious, and suspicious buyers lower their offers.

Your 90-day run

Days 1–15: Look at every line. - Print your profit and loss statement for the last 12 months. - Go line by line. For each cost ask: Does this help us serve customers or grow? If we cut it, would anyone notice?

Days 16–30: Sort the costs. - Keep: costs that drive revenue or quality. - Fix: costs that are needed but too high. - Cut: costs that don’t add value. - Separate: personal or one-time costs. Work with your CPA to track these clearly, or stop running them through the business.

Days 31–75: Act. - Cut what doesn’t add value. - Fix what’s too high (see the Procurement Savings playbook). - Look at overtime, rework, waste and callbacks. These are often hidden costs.

Days 76–90: Lock in the savings. - Set a monthly budget for each cost area. - Review actual vs. budget every month.

Checklist

Common mistakes

  • Cutting what makes you great. If you cut training, quality or the people customers love, revenue may fall faster than costs.
  • Cutting right before a sale. Buyers notice sudden cuts and may ask if they can last. Make changes early so you have a track record.
  • Hiding personal costs instead of documenting them. Don’t try to sneak them past a buyer. Track them clearly with your CPA so they can be fairly adjusted.

Hypothetical example (made-up numbers)

Imagine a $4,000,000 manufacturing company. On review, they find: - $30,000 a year in software and subscriptions nobody uses - $50,000 a year in overtime caused by poor scheduling - $20,000 a year in rework from one machine that needs repair

Fixing all three adds about $100,000 a year to profit. At 4x, that’s about $400,000 of added value.

Do this today: Find one cost on your P&L you’re not sure you need. Write it here: ____________

Playbook: Multiple Arbitrage, Explained

What it is

This one isn’t something you “run” in 90 days. It’s an idea you need to understand, because PE firms build their whole strategy around it.

“Arbitrage” means buying something in one place at a lower price and selling it in another place at a higher price.

“Multiple arbitrage” means buying companies at a lower multiple and selling them, often combined into a bigger company, at a higher multiple.

Why it works

Bigger, more stable companies usually sell for higher multiples than small ones. Why?

  • Less risk. A bigger company usually has more customers, more managers and more systems. If one thing goes wrong, the business survives.
  • More buyers. A $500,000-profit company has a small pool of buyers. A $5,000,000-profit company can attract bigger PE firms and larger strategic buyers. More buyers usually means more competition. More competition usually means higher prices.
  • Cheaper money. Bigger companies can often borrow on better terms, which lets buyers pay more.

So a PE firm might buy several small companies at lower multiples, combine them, professionalize them, and sell the whole group at a higher multiple.

Why this matters to you

You can use this idea two ways.

Way one: Climb the size ladder yourself. Every playbook in this book that grows your profit also moves you up the size ladder. As you grow, you may move into a range where more buyers want you and multiples tend to be higher. Ranges vary by industry, so ask an advisor what the steps look like for yours.

Way two: Know who wants you. If you’re the kind of company a PE firm would want as a platform or add-on, you should know it. A PE firm doing buy-and-build in your industry may be willing to pay more for you than a local buyer, because of how you fit their plan. Knowing this can change who you talk to and how you negotiate.

What to do in the next 90 days

Days 1–30: Learn your size bracket. Get a rough idea of your SDE or EBITDA and what multiples companies your size in your industry tend to get.

Days 31–60: Learn who’s buying. Search for PE firms and larger companies buying businesses like yours. Many announce their deals publicly.

Days 61–90: Decide your path. Are you aiming to grow into the next bracket? Become an add-on for a platform? Become a platform yourself? Write it down.

Checklist

Hypothetical example (made-up numbers)

Imagine three HVAC companies, each with $700,000 in EBITDA. On their own, say each might sell for 4x, or about $2,800,000 each. Together, that’s $8,400,000.

A PE firm buys all three and combines them. The combined company has $2,100,000 in EBITDA, plus some savings from shared costs. Say it reaches $2,300,000. With management, systems and three locations, a later buyer might pay 6x. That’s about $13,800,000.

Most of that jump didn’t come from growing profit. It came from the higher multiple.

This is why the people buying your company may see far more value in it than you do. Your job is to understand that value before you sit down at the table.

Pulling It All Together

You just read fifteen playbooks. Don’t try to run them all at once.

Here’s a simple way to pick.

If your profit is lower than it should be, start with Part One. Price Increase and Cost-Out often move fastest.

If buyers would worry about risk, start with Part Three. Owner Independence and Customer Concentration are often the biggest risks in small companies.

If you’re stable but flat, start with Part Two. Build the Marketing Engine, then expand.

If cash is always tight, start with Working Capital.

Whatever you pick, run the KPI Dashboard alongside it. It’s how you’ll know if anything is working.

Remember the math. Every dollar of profit you add can be worth several dollars when you sell. And every bit of risk you remove can raise the multiple on all of it.

Most owners never learn this until a buyer explains it to them across the table. By then it’s too late to fix.

You’re learning it now. That’s the whole difference.

Your 12-Month Growth Plan

Use one playbook at a time per quarter. Add a second only if you have a leader to own it.

My company today

Revenue (last 12 months): $____________ SDE or EBITDA (last 12 months): $____________ Rough multiple range for my size and industry: ____________ to ____________ Estimated value today: $____________

My 12-month targets

Revenue goal: $____________ SDE or EBITDA goal: $____________ Biggest risk I will reduce: ____________ Estimated value goal: $____________

Quarter 1 (Months 1–3) Playbook: ____________ Owner (who leads it): ____________ Target number: ____________ - [ ] Day 30 check-in - [ ] Day 60 check-in - [ ] Day 90 result: ____________

Quarter 2 (Months 4–6) Playbook: ____________ Owner (who leads it): ____________ Target number: ____________ - [ ] Day 30 check-in - [ ] Day 60 check-in - [ ] Day 90 result: ____________

Quarter 3 (Months 7–9) Playbook: ____________ Owner (who leads it): ____________ Target number: ____________ - [ ] Day 30 check-in - [ ] Day 60 check-in - [ ] Day 90 result: ____________

Quarter 4 (Months 10–12) Playbook: ____________ Owner (who leads it): ____________ Target number: ____________ - [ ] Day 30 check-in - [ ] Day 60 check-in - [ ] Day 90 result: ____________

Every week, all year - [ ] Update the KPI dashboard - [ ] Hold a 30-minute numbers meeting

Every month, all year - [ ] Review profit vs. last month - [ ] Re-check estimated value

End of year Ending SDE or EBITDA: $____________ Ending estimated value: $____________ Change in value: $____________ Next year’s first playbook: ____________

This booklet shares general ideas, not legal, tax or financial advice. Examples are hypothetical. Multiples and results vary. Confirm specifics for your company with your CPA and attorney.