There’s a particular kind of confidence that comes from owning a profitable business. Payroll clears. Customers keep coming back. There’s money left over at the end of the month. After years of grinding, those numbers become proof that the thing works. And they are proof—just not necessarily proof of what most owners think they are.
That said, a profitable company and a valuable company aren’t the same thing. You can build an exceptional income stream for yourself while simultaneously building something another person would have very little interest in owning. If every important customer relationship belongs to you, every major decision runs through you, the team depends on knowledge that lives mostly in your head, and revenue disappears the moment you stop pushing the machine forward, you may have created a great job. Maybe even a very lucrative one. But you haven’t necessarily created an asset.
That distinction matters long before anybody starts talking about selling. In fact, I’d argue that saleability is one of the more useful tests of business quality even if you have no intention of going anywhere. Strip away the language of M&A and what a buyer is really asking is pretty straightforward: What happens to this company if the founder gets hit by a bus, takes six months off, loses a major client, or simply stops being the person holding everything together? The more uncomfortable the answers, the more fragile the business probably is.
Founders don’t always see that fragility because we’re standing inside it. We know how the customers think, which employee can actually solve a problem and which one just looks busy, and which numbers in the forecast are real and which ones require a little optimism. But over enough years, that accumulated instinct becomes part of the way we do business. It feels like an advantage — and while we’re there, it is. The problem comes later when “the way we get things done” can’t be transferred with the company.
Buyers look at the same business from the other side of the table. They’re looking for recurring revenue instead of constant reinvention, a capable management team instead of a heroic owner, and a healthy spread of customers instead of one giant account that could leave next quarter. Clean financials, repeatable processes, institutional knowledge that exists somewhere other than somebody’s memory. They aren’t just buying earnings. They’re trying to understand how likely those earnings are to survive once the keys change hands.
That may be the more useful way for entrepreneurs to think about enterprise value in the first place. Building a more valuable company isn’t primarily about making it look attractive for some hypothetical buyer. It’s about reducing the number of ways the business can break. If you strengthen the team, diversify the revenue, clean up the financial story, document what matters, and make yourself less essential to everyday operations, you haven’t merely prepared for an exit. You’ve built a company that gives you more options while you still own it.
Few people see that distinction as clearly as Eggs! The Podcast guest Holli Moeini, author of Finding the Missing Millions in M&A. After 35 years as a CPA and decades spent growing, buying, selling, and advising businesses, Holli has seen what owners believe makes a company valuable—and what buyers actually pay for. The gap between those two ideas can be worth millions.
From the Numbers to the Deal Table
Holli Moeini has spent more than three decades inside the financial machinery of businesses—first as a CPA, then as an operator, buyer, seller, and advisor. Her career began in public accounting and audit, but an early role inside a company preparing for a sale pulled her into M&A almost by accident. From there, she moved deeper into corporate leadership, helping grow and scale companies and using acquisitions as a tool to accelerate that growth. Importantly, Holli notes that her M&A education didn’t come from traditional accounting training; she learned the work directly from an investment banker serving on her board and then refined that knowledge deal by deal.
After leaving corporate life following the pandemic, Holli found herself at an unexpected crossroads. A conversation with longtime M&A executive Adam Coffey—who has participated in billions of dollars in exits—helped push her toward entrepreneurship and eventually into advising owners navigating the same decisions she had spent years making from inside companies. What she found in the small- and middle-market business world was a widening gap between increasingly sophisticated buyers and owners who often had little guidance on how to prepare for a transaction.
That gap became the foundation for Holli’s work today and for her book, Finding the Missing Millions in M&A. Through her advisory work, writing, and education, she focuses on helping business owners understand the financial and operational decisions that create—or quietly destroy—enterprise value long before a company ever reaches the negotiating table.
Where Value Actually Comes From
Once you stop treating profitability as a proxy for value, the business starts to look different. Holli’s advice offers a useful way to examine the company through the eyes of the person who may someday have to own it without you.
“My philosophy is that you should always be ready to sell. The beauty of always being ready to exit is that you’re creating more value for you and your family right now.”
Actionable insight: Don’t wait for an acquisition offer to expose weaknesses you could have fixed years earlier. Build the company as though someone might inspect it tomorrow; even if you never sell, the result should be a cleaner, stronger, more resilient business.
“When you make my risk increase as a buyer, your price goes down. That’s how that works.”
Actionable insight: This may be the simplest way to think about enterprise value. Look at the business and identify what would make a stranger nervous about owning it—then start removing those risks one by one.
“I de-risk the buyer by having a leadership bench or a second in command that can replace me. That makes my value go up.”
Actionable insight: Founder dependence might feel like importance while you’re running the company, but it becomes a liability when someone wants to buy it. Start deliberately moving decisions, relationships, and institutional knowledge beyond yourself.
“Gross profit needs to be above 30%. Your selling, general and administrative expense needs to be less than 20%. And then your net income needs to be above 10%.”
Actionable insight: Holli uses Adam Coffey’s 30-20-10 rule as a diagnostic, not simply a scoreboard. If one of those numbers is off, don’t just push harder for revenue; figure out whether the underlying issue is pricing, cost of delivery, overhead, or something else entirely.
“If you have all of your revenue in a few companies’ baskets, my risk goes up as a buyer. And recurring revenue is a big deal here as well.”
Actionable insight: A $5 million business with one customer responsible for half its revenue is a very different asset from a $5 million business with a diversified customer base and predictable contracts. Growth matters, but the composition and durability of that growth matter too.
“Whatever you have in your business that’s risky is not attractive to buyers, period. So any way you can de-risk that is good and makes you more valuable.”
Actionable insight: Conduct a risk audit the same way a buyer would. Customer concentration, undocumented processes, shaky financials, dependence on one employee, inconsistent margins, owner-controlled relationships—every one of them gives the buyer a reason to discount what you’ve built.
“Your emotional and blood, sweat, and tears and everything that went into it—that is not transferable. You have to put in the time to prepare. I’d say, please prepare three years before.”
Actionable insight: Twenty years of sacrifice may explain why a business matters to its founder, but buyers can’t put that history on a balance sheet. If an exit is even a possibility, give yourself enough runway to turn personal effort into systems, financial performance, leadership depth, and assets someone else can actually own.
Build the Business Someone Else Could Run
The useful thing about looking at your company through a buyer’s eyes is that you don’t actually need a buyer for the exercise to pay off. If the business depends too heavily on you, if too much revenue comes from too few customers, if the financials are hard to explain, or if the processes only work because a handful of people know how to hold them together, those are problems whether you plan to sell next year, ten years from now, or never. A buyer may be the one who eventually puts a price on those weaknesses, but you’re already living with the risk.
That’s what makes this conversation bigger than M&A. The goal isn’t to spend every day polishing the company for some imaginary transaction. It’s to build something durable enough that your options expand over time rather than narrow. A business that can operate without constant intervention is easier to grow, easier to hand down, easier to step away from, and, yes, considerably easier to sell.
Profitability is still important. It just isn’t the finish line. The better question is what remains when the founder steps out of the picture. If the answer is a capable team, predictable revenue, clean numbers, good systems, and a company that knows how to keep moving, then you’ve built something considerably more valuable than a paycheck.
Thanks for reading.
—Ryan
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Reading list
If you're looking to go deeper on the themes from this week's newsletter, here are a few books that pair well with the conversation and offer a broader perspective:
Finding the Missing Millions in M&A — Holli Moeini
The natural place to continue this week’s conversation. Holli looks at the moments where value is quietly created or lost during a transaction—from the financial story and working capital to diligence, earnouts, and integration. More importantly, it reinforces the idea at the center of this week’s issue: maximizing the value of a business starts well before there’s a buyer at the table.Built to Sell — John Warrillow
One of the clearest books on the difference between owning a business and owning a business that can function without you. Warrillow’s central argument maps almost perfectly to this week’s theme: if the company depends on the founder for sales, decisions, relationships, and delivery, that dependence eventually becomes a ceiling on value.The Exit-Strategy Playbook — Adam Coffey
Coffey takes the owner through the sale process from the perspective of someone who has spent decades on the private-equity side of the table. It’s particularly useful for understanding how buyers evaluate risk, why preparing years ahead matters, and how the decisions made while you’re still operating the company eventually show up in the price someone is willing to pay.
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