Profitable businesses are wonderful. Revenue is strong, margins are healthy, growth is steady. By many metrics, you’re doing everything right.
But profitability alone doesn’t make your business sellable.
At Caber Hill Advisors, we’ve seen hundreds of transactions where the seller was blindsided: despite strong profits, the business failed to meet buyer expectations, leaving value on the table. The difference between being profitable and being truly sellable often comes down to readiness.
What Sellability Really Means
Let’s start with sellability, which isn’t just about EBITDA or current cash flows. Buyers are increasingly sophisticated. They seek businesses that are structured for transfer, built to scale, and free from hidden risks.
In other words, they want confidence. Confidence in leadership, systems, customer base, and growth potential.
Factors that Bolster Sellability
There are several critical areas where even profitable companies fall short, which include:
Leadership & Succession Planning
You may run all parts of the business today, but can it survive without you? Buyers want to understand whether trusted leaders exist who can sustain growth.
Operational Infrastructure & Systems
Profits can mask inefficiencies. If core processes are manual, data is fragmented, or you lack solid SOPs, scaling becomes tricky. Businesses with clean financial reporting, reliable analytics, and repeatable workflows are far more attractive to buyers.
Revenue Quality and Customer Concentration
A risk in many profitable businesses is an overdependence on a single client, channel, or geography. A diversified, predictable revenue base with recurring components (subscriptions, contracts, renewals, etc) reduces worrisome concentrations.
Transparent Financials & Modeling for Growth
Profit is only one piece. How you’ve calculated EBITDA, how clean and auditable past financials are, and whether you can project into future opportunities separate top-valued deals from average ones. Buyers want to see a track record AND a roadmap.
Brand, Reputation, and Market Position
A strong brand, favorable market perception, digital presence, and reputation for quality or innovation can be powerful differentiators. These don’t always convert directly to profit, but they influence willingness to pay.
WATCH Craig talk with the doctor-owners of Areo Dental on how they focus on optimizing their practices for profit and free cashflow.
What Business Owners Can Do to Be Sellable
- Conduct a sellability diagnostic to identify strengths and gaps in leadership, operations, financials, and market position.
- Implement strong bookkeeping and financial reporting practices to ensure your EBITDA and other metrics are clean and transparent.
- Diversify revenue streams and decrease dependency on single clients.
- Document and systematize processes to reduce founder dependency.
- Build a culture of continuous improvement and ensure talent retention and leadership depth.
Bottom Line: Profitability Is a Key Foundation, But Not All Buyers Look for
If you don’t build sellability, you may only ever get part of the value your business deserves. In the world of middle market M&A, buyers are paying attention not just to what your business has done, but to how it is built, and whether it can thrive after ownership changes.
If you’d like to understand where your business stands, Caber Hill Advisors is here to help. Schedule time with Craig Castelli or another member of our advising team and we’ll help ensure you don’t just survive the sale process, but you thrive in it.
