When you’re selling a business, numbers tell a story.
But there’s a catch.
Buyers aren’t just looking at revenue. They want to know if the financial engine is stable and has room to grow once the owner steps away.
This week’s newsletter looks at the metrics that matter most to buyers.
We’ll cover:
- 3 insights on key metrics that shape buyer perception
- 2 frameworks to help you evaluate your own reporting
- 1 action step you can take this week to get started
3 Insights About Metrics
1. Not all metrics hold the same weight
There are likely dozens of metrics you track in your business. However, only a handful matter for buyers. These key metrics tend to be those that reveal the health and future potential of your business.
Revenue trends, EBITDA quality, pipeline strength, and customer concentration are weighted far more heavily than vanity stats. A detailed report with the wrong metrics often distracts from the powerful growth story you want to tell.
2. Metrics should show growth potential
Buyers look for what the business will do next, not just what it’s done in the past. Your metrics should reflect this.
Forward-looking metrics matter most to buyers. Think pipeline health, backlog, and forecast accuracy. These numbers reveal whether the company has momentum.
A business with steady earnings but no growth story is far less attractive than one with a credible path to expand.
3. EBITDA quality matters more than top-line growth
Serious buyers want to see whether earnings are sustainable, whether costs are under control, and whether margins are healthy.
Strong EBITDA demonstrates that growth is profitable. A business with consistent, clean EBITDA is often worth more than a higher-revenue business with shaky earnings.
2 Frameworks That Shape The Process
The Metrics Buyers Trust
When evaluating a business, buyers often zero in on four metrics:
- Revenue
- EBITDA
- Pipeline
- Forecast
These numbers give them a clear picture of past performance, present health, and future potential.
Revenue and EBITDA prove what the business has achieved. The pipeline and forecast reveal what’s likely to happen next.
Together, they show whether the company can continue creating value after the owner exits.
The Diversification Matrix
A healthy business spreads revenue across customers, products, and markets.
The Diversification Matrix helps owners visualize where risk lies by asking three simple questions:
- Do a few customers represent a disproportionate share of revenue?
- Is revenue concentrated in a single product or service line?
- Does the business rely heavily on one geographic or industry market?
If the answer is yes to any of these, the business carries a concentration risk.
List Of Our Completed Transactions
1 Action Item This Week
Build a one-page dashboard.
Identify your four most important metrics. Revenue, EBITDA, pipeline, and forecast are a good start. Track them in one place.
The sooner you build the habit of measuring what matters, the more exit-ready your business will be.