Keys to Building a Sellable Business

Hey founders,

Let’s talk about something that might not be on your radar just yet, but it absolutely should be: building a sellable business.

Whether or not you ever plan to sell, having a business that's structured to be sellable WILL increase its value. It makes everything run smoother, gives you more options, and—most importantly—it allows your business to thrive without relying on you for every single decision.

This week, we’re breaking down what makes a business sellable, so you can start applying these strategies to your own company, no matter what stage you’re in.

1. What Makes a Business Valuable?

The first thing to know is that a business’s value isn’t just based on how much revenue it generates. 

$1M in sales ≠ $1M valuation. 

Valuation depends on a variety of factors, including profitability (also known as EBITDA), growth potential, and even how streamlined your operations are. 

Some businesses are worth millions without even being profitable yet—especially in industries like tech and AI.

But for most of us, a more realistic goal is to focus on profitability and building a business that’s financially stable. This is the key to unlocking a higher valuation, and it starts by getting the fundamentals right.

2. Keys to Being a Sellable Business

There’s no one right way to build a valuable company, but there are some foundational elements that most sellable businesses share. 

Here are the keys you should focus on:

Consistent Revenue: Steady, predictable cash flow is the most important factor when valuing a business. Buyers want to see that the business can sustain itself with regular income.

Growth: A business that shows stable growth over time is far more attractive than one with volatile earnings. Consistent growth is a sign of a well-managed business with potential for expansion.

Management Team in Place: A big key for buyers is whether the business can run smoothly without you. Having a solid management team in place gives them confidence that the business will thrive even if you step away.

Systems & Processes: Buyers want to see documented systems for everything from customer relationships to sales processes. Having clear systems in place means the business can scale.

Clean Financials: Your financial records need to be clear, organized, and up to date. This is critical not only for potential buyers but also for your own ability to make informed business decisions.

Branding & Reputation: A strong brand and positive reputation will boost your business’s value. Think about how your business is perceived, and work to build a brand that’s recognized and trusted.

3. Start Thinking Sellable from Day One

Here’s the truth: even if you’re not thinking about selling right now, building your business to be sellable will help you succeed.

Why? Because focusing on the elements that make a business sellable also helps you build a company that’s more scalable, more efficient, and more sustainable. 

It means less stress for you, and a business that can survive—and thrive—without you having to be involved in every decision.

The Big Takeaway: Build with Options in Mind

The key takeaway this week is simple: build a business that works for you, but also has value to others. 

By putting the right systems, processes, and team in place, you’re not only setting yourself up for success—you’re also creating options. 

Whether you want to continue scaling, bring in a partner, or sell down the line, having a sellable business means you can choose the path that works best for you.

Questions for the Road:

1. Do you have consistent revenue and growth? If not, what changes can you make to stabilize your income?

2. How can you start delegating more tasks and building a team that can run the business without you?

3. What systems and processes can you document this week to streamline your operations and make your business more scalable?

That’s it for this week! Keep pushing forward, and remember—building a sellable business doesn’t just make it easier to sell. It makes it easier to run.

P.S.

This week the My First Million guys actually talked about this exact topic! Starting at around min. 46 they do a dive on what makes a business sellable (and why VCs have a double standard sometimes)

Check it out!

— The Tribe Team