Grow your company like it’s time to sell (even if you’re not selling)

I was chatting with a founder friend recently.

He’s been running his tech product business for more than a decade now and it’s doing ok. They’ve got around 30 employees, steady but not spectacular growth, and a solid enough product.

But as we talked I sensed something wasn’t quite right. I sensed a new lack of drive and a growing tone of exasperation with the business.

After a bit of gentle questioning he confessed “I’m fed up. It’s time for a change. I’m thinking of selling“.

And then he went on to expand on what that meant in practice: “But now it’s a mad scramble to get things sorted. There are so many things to get tidied up all at once.”

Reflecting on our chat, I began to wonder….why do founders wait until they’re ready to sell a business before getting things in order?

What if they built their companies every day as if they might be sold the very next?

Valuations and discount factors aren’t just for sellers

Many of the things that maximise valuation when selling are the same things that make for a well-run, successful company.

Pulling on that thread, let’s think about what potential acquirers really look for:

• Consistent financial performance
• A strong management team with minimal founder dependence
• Scalable processes
• A diversified customer base
• Competitive differentiation in the market
• A clear long term strategy for growth

That sounds to me like a founder’s wishlist too…regardless of whether they actually intend to sell.

When valuing a business, buyers always look for reasons to pay less. These are things that are called “discount factors” in the M&A jargon.

But addressing discount factors isn’t just about increasing a sale price.

They’re (mostly) the things you should do anyway to building a robust, efficient business.

A buyers wants to see management accounts with predictable revenue and profit. They want to see tight management of cashflow and get a sense that financial data’s being used to run the business, not just a monthly glance in the rear view mirror.

If they spot a business relying too heavily on a few big clients, that’s a red flag. And for founders it should be the same.

During growth, it’s easy for some customers to grow fast. That’s often a driver of your overall growth and is an inevitable part of scaling. But keeping an eye on revenue concentration and the risks it might pose is vital when building a resilient business.

And if your business relies too heavily on you or a few key team members, that’s a problem. Documenting processes, cross-training staff and building systems that reduce this dependence is at the heart of creating a business that can continue to exist without your founding energy.

Acquirers want to know the long term plan. Where’s the value once the deal’s done?

That’s where a clear multi-year strategy and shorter term roadmap with actionable projects comes into play. Without that long term plan, your valuation will be lower.

But now’s the point where I need to contradict myself just a bit.

What about taking risks? What about reinvesting in growth rather than maximising profit? What about taking a calculated bet on a new feature?

How do these things sit with running a business like it’s about to be sold?

The answer is they don’t.

Like all good rules, there are exceptions.

There are times when running your business like it’s perpetually for sale isn’t the best move.

Sometimes it might be right to invest heavily in new roles ahead of revenue, dragging margin down in the short term. If it’s the right thing for the long term, then ignore my advice.

Or taking a bold step to launch something new? A sale-ready founder might shy away from this, but through a longer term lens those big bets are exactly what’s need.

The key thing here is learning to balance both perspectives. Build a business that’s healthy, efficient, and valuable – but not at the expense of growing and innovating.

So how do founders find the sweet spot between these seemingly opposing viewpoints? Here are four things I discuss with founders I work with:

1. Always build strong foundations: Strong financials, efficient processes and a differentiated value proposition are always good business.
2. Build for scaling: Even if you have no plans to sell, design your organisation and structure as if it could run without you. It’ll make your life easier, your team happier and your business stronger.
3. Stay flexible: Don’t let valuations rule your world. Be willing to make strategic investments or take the calculated risks when the time’s right. Respect the value of your instincts on these calls.
4. Regular check-ins: Schedule a regular cadence by doing periodic “sale readiness” reviews. They’ll keep you honest, highlight areas for improvement and allow you to take a different perspective on what’s important right now.

Running your business like it’s time to sell doesn’t mean you have to sell. It means building a company that’s valuable – to you, your team, your customers and, if the time’s right, future buyers too.

It’s about creating something that could stand and thrive on its own, even if you stepped away. There are few things in life that are certain, but whether you sell to a buyer or hand over the reins to someone else, I guarantee you that one you will step away.

Are you building a business that’s ready for anything? Or are you waiting until the “for sale” sign goes up to get your things in order?

As a founder the choice is yours, but having worked with plenty of founders I know which approach I’d be going for.