Owning a professional services business generating 7 figures/yr in revenue with a +30% profit is common. But being able to exit that business is not.

Service businesses are difficult to sell because:

1. They’re not predictable
2. They depend on the owner
3. Growth requires hiring people

All three are liabilities. Acquirers want assets. So do you.

How much is your asset worth?

A common multiple for services businesses is 3.5X EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Think of it as 3.5X profit. Could you live on that for the rest of your life? Most founders can’t.

When you first realize the situation you’re in, it’s tempting to frantically focus on:

1. increasing revenue
2. increasing profit

What you want to do first is increase your multiple. The multiple is a reflection of risk. If an acquirer perceives your business as risky, your multiple will be low.

To get a higher multiple, lower the risk.

Start here:

1. Reduce dependences: on you, key employees, and large clients.

2. Productize your services so you scale with systems not people.

3. Increase the predictability of cashflow with recurring revenue.

Starting right now, commit to seeing yourself as an investor, and your business as an asset. The more valuable your asset is, the more options you have.

Keep it and scale, hire someone to run it for you, or exit when you’re ready. That’s the ultimate freedom.