← Enterprise Value Improvement for Mid-market Companies
Beyond EBITDA: The Value Drivers Buyers Actually Score
Owner and key-person dependency, customer and supplier concentration, contract risk, and the quality of management information are consistently among the first things a buyer's due diligence team examines, often before they've spent much time on the financial statements themselves. Each represents a specific kind of risk to a buyer, that the business won't run the same way without its current owner or a handful of key people, which a headline EBITDA figure says nothing about.
The four value drivers and the risk each one represents
| Value driver | Risk it represents to a buyer |
|---|---|
| Owner / key-person dependency | Business won't perform the same once the owner steps back |
| Customer / supplier concentration | Revenue or supply depends on too few relationships |
| Contract risk | Key agreements are weak, short, or easily lost |
| Management information quality | Numbers can't be trusted without the owner explaining them |
Why these drivers matter more than the multiple itself
Two businesses can have identical EBITDA and receive very different offers, because these underlying risk factors determine how much a buyer discounts the multiple they're otherwise willing to pay. A business scoring well on these drivers can command a meaningfully higher multiple than one that doesn't, even at the same earnings level.
Which of these is usually the biggest factor
Owner and key-person dependency tends to carry the heaviest discount, because it represents the risk a buyer cares about most directly, will the business perform the same way once the current owner steps back. Customer concentration is usually the second most significant.
How to find out where your own business actually stands
A value driver analysis scores each of these dimensions specifically, calibrated to what matters most in your sector, giving a concrete picture of which factors are currently suppressing your multiple, rather than a general sense that the business is probably fine.
What Is Your Company Actually Worth, And What's Holding That Number Down?
The Enterprise Value Scan makes your value drivers explicit and builds a professionalisation roadmap in the order that moves the number fastest, starting two years before you need it, not six months.