Avoid these 7 business valuation killers that could cost you millions
- Evo-Valuations
- Sep 7
- 2 min read
Introduction
When you sell your business, every pound of profit matters, but so does how buyers perceive that profit.
Certain mistakes, called business valuation killers, can knock tens or even hundreds of thousands off your sale price.
The frustrating part? Most of these are 100% avoidable if you catch them early.
1. Mixing Personal and Business Expenses
Running personal costs through the business muddies your true profit picture.
Fix:
Remove all personal expenses from your accounts 12–24 months before sale.
Keep a clean, transparent P&L buyers can trust.
2. Over-Reliance on the Founder
If you’re the glue holding everything together, buyers see risk.
Fix:
Delegate operational and client-facing tasks.
Train a second-in-command and document processes.
For more on reducing owner dependency, see How to Make Your Business Sellable Without You
3. Customer Concentration
When one or two clients generate most of your revenue, losing them could sink the business.
Fix:
Diversify your customer base.
Secure long-term contracts where possible.
4. No Written Contracts
Handshake deals won’t impress buyers, they want guaranteed income streams.
Fix:
Put all major agreements in writing.
Use renewal clauses to lock in recurring revenue.
5. Poor Record-Keeping
Sloppy or incomplete records raise red flags in due diligence.
Fix:
Keep all tax, legal, and compliance documents up to date.
Use a cloud-based folder to store everything neatly.
6. Low-Quality Profit
Revenue is vanity. What matters is sustainable, repeatable profit.
Fix:
Drop low-margin, high-maintenance offerings.
Focus on recurring or contracted income streams.
7. No Growth Plan
Buyers pay more when they can see how the business (and business valuation) will grow after acquisition.
Fix:
Prepare a simple 12–24 month growth plan based on real data.
Include expansion opportunities in your sale pitch.
Related Reading
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Your Next Step
The Exit Smart. Retire Rich. 3-Year Exit Plan guide and Exit-Ready App help you:
Audit your business for all 7 valuation killers (and more)
Get a clear score showing where you’re losing value
Follow a proven, step-by-step plan to fix these issues before sale
Track your progress so you can exit at the top of your value range
Your business is likely your biggest asset. Don’t leave its future, or your financial freedom, to chance. Start your 3-Year Exit Plan today and take control of your legacy.
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