How to Make Your Business Worth 5x More Before You Sell It!

11 April 2025

In today’s rapidly evolving business environment, companies that thrive are those that leverage technology to optimize operations, improve customer experiences, and scale efficiently. If you plan to sell your business in the near future, transitioning into a technology-driven company can significantly increase your valuation—potentially up to five times more. This guide walks you through the steps of integrating technology, from understanding the importance of automation to choosing the right IT partner. We’ll also explore real-world examples that demonstrate how automation can reduce costs and boost profitability.

Why Technology-Driven Companies Command Higher Multiples

Technology-focused businesses often sell at much higher multiples of EBITDA than traditional ones. Here’s why:

• Scalability: Technology allows for business growth without a matching rise in operational costs. Automated systems mean that as customer demand increases, the need for additional labor doesn’t increase proportionally.
• Efficiency: Automating manual processes reduces errors and increases productivity, which leads to higher profit margins.
• Data-Driven Decision Making: Technology allows for better data collection and analysis, which supports smarter, more profitable decisions.
• Recurring Revenue Models: Many tech-based companies adopt subscription models, creating stable and predictable revenue streams.

Transitioning to a technology-driven model can leverage these benefits, making your business far more attractive to potential buyers.

The Cost of Inaction: Why Not Automating Can Put You Out of Business

Failing to adopt automation can lead to higher costs, reduced competitiveness, and increased risk of human error:

• Higher Operating Costs: Manual processes are time-consuming and costly, requiring more staff.
• Reduced Competitiveness: Automated businesses can adapt more quickly to changes in the market, giving them a competitive edge.
• Risk of Errors: Manual work increases the likelihood of mistakes that can be costly.
• Employee Turnover: Repetitive tasks can cause dissatisfaction among employees, leading to higher turnover rates.

For example, a business manually processing customer orders might spend 250 hours per month on this task, costing $5,000 in labor. Automating this process could save 216 hours and $4,320 monthly, boosting profitability and efficiency.

Calculating the ROI of Automation: Real-World Examples

When considering automation, evaluating the return on investment (ROI) is crucial. Automation can drastically reduce labor costs and increase efficiency.

• CRM Process Automation:
  • Manual Process: Entering customer data manually takes 2 hours daily.
  • Automated Process: Reduces this to 10 minutes per day.
  • Monthly Savings: 38 hours saved; $760 in labor costs saved.
• Proposal Process Automation:
  • Manual Process: Preparing proposals takes 4 hours each.
  • Automated Process: Reduces this to 1 hour.
  • Monthly Savings: 30 hours saved on 10 proposals; $600 saved.
• Finance Process Automation:
  • Manual Process: Reconciling accounts takes 10 hours weekly.
  • Automated Process: Reduces this to 1 hour.
  • Monthly Savings: 36 hours saved; $720 saved.

These examples show how automation can save time and reduce costs, contributing to a higher valuation.

Impact-Effort Analysis: Prioritizing Your Automation Efforts

Focusing on high-impact, low-effort automation projects can maximize your returns. Here’s how to do it:

1. List Potential Processes: Identify all the manual processes you could automate.
2. Estimate the Impact: Rate each process based on the potential impact of automating it (1-5 scale).
3. Estimate the Effort: Rate each process on the effort required to automate it (1-5 scale).
4. Plot on a Matrix: Use a matrix with ‘Impact’ on the Y-axis and ‘Effort’ on the X-axis.
5. Prioritize: Focus first on processes in the ‘High Impact, Low Effort’ quadrant.

By focusing on the right projects, you can achieve quick wins that boost productivity and savings.

Build vs. Buy: Making the Right Decision for Your Business

Once you know which processes to automate, decide whether to build custom software or buy off-the-shelf solutions.

• Build:
  • Pros: Tailored fit, full control, no licensing fees.
  • Cons: Higher upfront costs, longer time to market, maintenance responsibility.
• Buy:
  • Pros: Lower initial costs, quick implementation, support from vendors.
  • Cons: Less customization, ongoing licensing fees, dependency on the vendor.

Choose to build if the process is unique and core to your business. Opt for ready-made solutions for common processes to save time and cost.

Next Steps: Budgeting, Selecting an IT Partner, and Getting Started

1. Allocate a Budget: Assess your available resources and consider both initial and ongoing costs.
2. Select an IT Partner: Find a partner with proven experience and scalability, and ensure they align with your company culture.
3. Get Started: Launch your automation projects with a clear timeline and milestones. Regularly review progress to stay on track.

Transform Your Business with Crebos

Turning your business into a technology-driven enterprise isn’t just about increasing its value before a sale—it’s about future-proofing against industry changes. By embracing automation, you can cut costs, boost efficiency, and significantly enhance your business’s valuation.

Ready to take the next step?

Contact Crebos today for a free consultation, and let’s make your business worth 5x more!