Buyers Read Your P&L Differently Than You Do
Your financials might look strong.
Steady revenue. Solid gross margin. Clean EBITDA.
But a buyer sees something else entirely.
They’re not just reading the numbers. They’re testing them.
They’re looking for what holds up—without you.
And that gap between your internal lens and theirs?
That’s often the difference between a 6x multiple and a 4x.
What Founders See vs. What Buyers Question
Most founders look at their P&L and see stability.
Buyers look at the same document and ask:
Revenue growth → Is it recurring, or dependent on one-offs?
Gross margin → Is it consistent across crews and service lines?
Headcount leverage → Is it system-driven or founder-dependent?
Large jobs or anchor customers → Are they transferable and priced correctly?
EBITDA → Is it sustainable post-transition, or propped up by the founder?
This isn’t about distrust—it’s about pressure-testing.
And if you haven’t built your business to withstand that lens, the discount is coming.
Four Things Buyers Adjust for Immediately
1. Revenue That Looks Good, But Performs Poorly
Not all revenue is equal. Buyers haircut revenue they perceive as:
Low-margin or labor-intensive
Unrepeatable (one-time projects, seasonal spikes)
Owner-sold or manually scoped
Tied to customers with long payment terms or high churn
If a meaningful portion of your revenue fits that profile, expect it to be carved out of your valuation model.
2. Operational Margin That Doesn’t Show Up Consistently
A high gross margin on your P&L doesn’t mean much if it’s uneven in the field.
Buyers will ask for job-level data. They’ll run their own analysis on:
Time-on-site vs. budget
Crew productivity
Callback rates
Gross margin per service line or team
If you can’t show field consistency, they’ll assume it’s not there—and price accordingly.
3. Founder Dependency
Buyers don’t want to inherit another job.
If you’re:
Quoting key jobs
Managing schedules
Acting as head of sales or operations
Then the value isn’t in the business—it’s in you. That creates risk.
Risk reduces price. Or kills deals entirely.
4. Scalability Under Pressure
Buyers model what happens when the business grows 25–50% in the first year post-close.
They’re asking:
Do systems hold up under volume?
Are roles clearly defined?
Can teams execute without escalation?
Is growth constrained by the founder or by infrastructure?
If the answer is unclear—or inconsistent—they assume growth comes with drag. And they price that in.
Final Thought
Your P&L won’t carry the deal.
Buyers will go deeper—into your operations, your margins, your team structure, and your ability to scale without friction.
The more you align your business to that lens now, the more leverage you’ll have when the process starts.
Looking Ahead
Buyers aren’t just looking for clean financials. They’re assessing whether the business can operate at scale, with consistency, without you.
That’s not something you fix in diligence.
It’s something you build long before you need it.