Kishen Patel
Founder, Consult EFC | ICAEW Chartered Accountant
Kishen helps UK founders and SMEs prepare for high multiple exits and strategic acquisitions. By combining Big Four technical precision with deep corporate finance expertise, he helps leadership teams normalise EBITDA, implement robust financial controls, and command premium valuations. Kishen ensures your financial data is built to withstand the rigorous scrutiny of private equity and institutional buyers.
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Every week, I speak with UK founders who are preparing for an exit or a major capital event. They obsess over increasing their top line revenue, assuming this automatically translates to a higher valuation.
Revenue growth is important. However, sophisticated buyers and private equity firms do not buy revenue. They buy future cash flows, and they apply a multiple based purely on risk. If your business looks risky, your multiple drops. If your financial foundation is bulletproof, your multiple expands.
The difference between a 4x multiple and an 8x multiple on £2m of EBITDA is £8m in your pocket at closing.
Having spent years in Big Four and investment banking, I know exactly how institutional buyers scrutinise UK SMEs and SaaS companies. If you want to maximise your exit value, you must stop thinking like a startup founder and start thinking like an acquirer.
Here are the five exact strategies we use at Consult EFC to increase EBITDA multiples for our clients.
1. Prove Your Quality of Earnings (QoE)
When a buyer issues a Letter of Intent, their first step is financial due diligence. They will bring in their own Big Four accountants to tear your historical financials apart. They are looking for your true Quality of Earnings.
Reported profit is rarely the same as adjusted EBITDA. To defend a high multiple, you must present a clean, normalised EBITDA calculation before the buyer even asks for it.
You need to identify and document all exceptional items. This includes:
- Above market or below market founder salaries.
- One off legal fees or restructuring costs.
- Personal expenses run through the business.
- Non recurring project revenues.
If a buyer finds these adjustments first, they will use them to chip away at your valuation. If your fractional CFO presents a rigorous, audited Quality of Earnings report upfront, you control the narrative and defend your multiple.
2. Transition to Contracted, Recurring Revenue
All revenue is not created equal. A business generating £5m from one off project sales will always command a lower multiple than a SaaS business generating £5m in Annual Recurring Revenue.
Buyers pay premium multiples for predictability. They want to know that on the first day of the new financial year, a significant portion of their revenue is already locked in.
To drive your multiple upward, you must audit your current revenue streams. Look for opportunities to transition one off products into retainer models, subscription tiers, or long term managed service contracts. Even a 20 percent shift from transactional to recurring revenue can increase your baseline multiple by a full turn.
3. Implement Institutional Grade Financial Controls
A messy finance function destroys deal credibility. If it takes your team fifteen days to close the month end, or if your board reporting consists of a basic spreadsheet exported from Xero, buyers will assume your operational controls are equally chaotic.
We recently worked with a UK enterprise that suffered from limited visibility and manual data entry. We parachuted our team in and automated their data integration, cutting their month end close time by 40 percent.
When you prepare for an exit, you need:
- A month end close of under five days.
- Automated revenue recognition policies.
- Interactive dashboards tracking Actuals versus Budget.
- A single source of truth for all financial data.
Buyers pay a premium for a turnkey business. If they have to spend their first six months rebuilding your finance department, they will deduct that cost and risk directly from your valuation.
4. Eliminate Customer Concentration Risk
Customer concentration is the silent killer of high valuations.
The golden rule in corporate finance is the 20 percent threshold. If a single client accounts for more than 20 percent of your total revenue, buyers view your business as highly fragile. If that client leaves post acquisition, the buyer loses their return on investment.
To mitigate this and boost your multiple, you need a targeted commercial strategy long before you go to market. You must actively dilute your largest accounts by aggressively acquiring smaller clients in new verticals. If you cannot dilute them, you must lock those key clients into ironclad, multi year contracts to transfer the security to the buyer.
5. Build a Second Tier Management Team
Private equity firms and strategic buyers use the “bus test”. If the founder gets hit by a bus tomorrow, does the business survive?
If you hold all the key client relationships, make all the strategic decisions, and act as the primary rainmaker, you do not own a business. You own a high paying job. Buyers will heavily discount your multiple because the asset is completely dependent on you.
You need to build a management structure that operates independently. This means having a strong sales director, an autonomous operations lead, and a strategic financial leader like a fractional CFO. When you can demonstrate to a buyer that the company grows predictably while you are on holiday, your EBITDA multiple scales dramatically.
Do Not Leave Money on the Table
Preparing for an exit is a multi-year process. It requires fusing the meticulous rigour of a Big Four chartered accountant with the strategic vision of an investment banker. You cannot fix systemic financial issues three months before a sale.
If you are planning an exit in the next 12 to 36 months, you need to know exactly where you stand today.
Calculate Your Valuation Gap Now Stop guessing your worth. Let Consult EFC build the investor grade financial foundation your exit demands. Book a free 30 minute strategy call with me today, and we will translate your financial data into a high multiple exit.
Maximise Your Exit Valuation
Poor financial controls and un-normalised EBITDA are the primary reasons business sales fall through during due diligence. Spend 30 minutes with Kishen Patel to discover how a Big Four-trained Corporate Finance Adviser can protect your multiple and secure your financial narrative before you go to market.
Identify and document every exceptional item to present a clean, adjusted EBITDA. We ensure buyers see the true, maximum profitability of your business.
We audit your historical financials and build a bulletproof data room. Eliminate red flags before institutional buyers or private equity firms start their review.
● Contact us today to secure your exit valuation.
