How to increase company value before selling?

The best time to start preparing for sale is 24 months before you want to close. Strategic value enhancement can increase your exit price by 40-100% through a combination of EBITDA improvement and multiple expansion. ### Technical Explanation #### Phase 1: Foundation (Months 1-6) 1. Stop tax minimization: Reverse aggressive provisions, normalize expenses, show true earning power 2. Normalize owner compensation: Reduce salary to market rate, stop personal expenses through the business 3. Clean the balance sheet: Sell non-core assets, settle dormant liabilities, resolve litigation 4. Identify hidden reserves: Commission an independent asset appraisal for machinery, real estate, inventory #### Phase 2: Strengthening (Months 7-12) 5. Reduce owner dependency: Hire or promote a general manager, delegate customer relationships, document processes 6. Diversify revenue: Reduce top-client concentration below 15%, convert project revenue to recurring contracts 7. Invest in growth: Spend on sales and marketing to show a growth trajectory, even if it temporarily compresses margins #### Phase 3: Positioning (Months 13-18) 8. Prepare the narrative: Build an Information Memorandum highlighting value drivers, not just financials 9. Fix operational issues: ISO certifications, IT upgrades, ESG compliance — these remove buyer objections 10. Optimize legal structure: Convert GmbH to AG if needed, clean up shareholder register, resolve minority issues #### Phase 4: Execution (Months 19-24) * Commission Vendor Due Diligence * Finalize the normalized EBITDA bridge * Identify and pre-qualify potential buyers * Launch structured sale process with competitive tension #### The Math of Value Enhancement Starting position: EBITDA CHF 400,000 × 4.5× = CHF 1,800,000 After enhancement: EBITDA CHF 600,000 × 6.0× = CHF 3,600,000 Value increase: 100% (+CHF 1,800,000) from 50% profit improvement + multiple expansion