You spent twenty years building this business. You reinvested the profits. You paid yourself less than the market for a decade so the company could grow. You built a team, earned customer loyalty, and created something that runs without you being in every room. The number in your head reflects all of that. It should.
A buyer doesn't care about any of it.
This is not cynicism. It is arithmetic. A strategic acquirer or a private equity fund looks at one thing first: what does this business earn, reliably, after we adjust for everything the owner did to make the P&L look the way it does? That number. normalised EBITDA. is almost always different from what appears in your accounts. Sometimes dramatically so.
The adjustments go both ways. If you paid yourself CHF 400,000 per year and a market-rate CEO would cost CHF 180,000, a buyer adds back CHF 220,000 to your earnings. That is positive. But if your three largest customers represent 60% of revenue, a buyer applies a risk discount to every multiple they consider. That is negative. and it compounds.
The multiple itself — the number a buyer applies to your normalised EBITDA — is not fixed. It moves with sector, size, growth rate, customer concentration, and management dependency. In Southern European SME transactions, multiples typically range between 4× and 8× EBITDA for businesses in the €2–15M range. The difference between 4× and 8× on €1M of normalised EBITDA is €4 million. That is not a rounding error. That is the gap between a life-changing outcome and a disappointing one.
Three things move you from 4× to 8× faster than anything else. First: revenue visibility. Second: management depth — if the business cannot run without you, a buyer prices that into the multiple. Third: clean financials. A buyer who finds surprises in due diligence does not renegotiate. They walk.
The most important thing you can do today is commission an independent normalisation of your EBITDA. Not from your accountant. From someone who thinks like a buyer.
I have reviewed hundreds of information memoranda from businesses that wanted to sell. The ones that never closed had one thing in common: the owner had spent years building the business on their own terms, and had never once thought about it from a buyer's perspective.
The normalised EBITDA is not an accounting exercise. It is the first thing a buyer calculates when deciding whether to keep reading. If the number looks wrong. too high, unexplained, or inconsistent with the sector. the process stops before it starts. Most sellers never know why.
The most common mistake I see: owners who add back their salary correctly, but forget that the buyer will replace them with a professional manager. The add-back is legitimate. But the buyer builds in the replacement cost on their side. and the net effect is smaller than the owner expected. Know both sides of that calculation before you sit across the table.