Team Transparency = Millions
💣 You'll learn: How strategic transparency with your team can get you millions at exit
⏱️ Read time: 3 minutes
🔍 Real deal analyzed: A $1M EBITDA retail services company
THE REAL DEAL
The Valuation Equation That Actually Worked
I recently evaluated a retail services company with 35 employees across three locations. The owner shared exit plans with key managers a year before hitting the market — but with a strategic approach that proved transformative.
It wasn't just about sharing information and waiting.
Premium Valuation = Strategic Disclosure + Guided Preparation
The owner carefully selected which team members would know, provided clear objectives for strengthening the business, and created incentives aligned with exit goals.
While competitors typically sold for 3x EBITDA, this approach commanded 4.5x — a $1.5M premium on their $1M EBITDA.
DEAL DETECTIVE
Tracking the Value Creation
Here's how selective transparency translated to dollars:
Starting Valuation: 3x industry multiple on $1M EBITDA = $3M
Process Documentation Improvement: +$300K
Customer Relationship Transfers: +$400K
Leadership Team Development: +$500K
Clean Due Diligence Process: +$300K
Final Valuation: 4.5x multiple = $4.5M
VALUE VAULT
Making Transparency Strategic
For Sellers: Choose team members who demonstrate long-term commitment and don't aspire to ownership. Provide specific objectives for strengthening transition readiness. Create incentives tied to successful exit.
For Buyers: Businesses with strategically informed teams often have solved the exact problems you'd otherwise discover post-acquisition, justifying premium valuations.
The Outcome: The business sold for $4.5M instead of $3M because selective transparency created measurable improvements in exactly the areas buyers value most. Rather than creating risk, this approach systematically eliminated the friction points that typically reduce offers during due diligence.
Stay rebellious,
kinza
p.s. Run the plays from my Strategic Transparency Playbook, free here.
p.p.s. I’ll advise on your acquisition or exit strategy. Just reply to this email with “need help.”
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