Mark Osborne walks through how to cut nonessential expenses before selling a business. One MSP client ditched expensive fridge and lunch benefits to boost EBITDA. Private equity investors scrutinize these "nice-to-have" costs hard.
So it actually has a couple of different meanings in the sense that one is, you know, really going through line item, all your expenses, looking, identifying what's essential, what's not essential, and, you know, really streamlining it to the point. Like, I'll give you an example. Like, we had a client in my MSP world that when I owned that business, I saw like it was visual. They were skinny bombing to the point of that, like, they used to have every type of drink you could ever want in the refrigerator for their 250 employees. And they like stopped all the— they used to bring lunch in every day for them. And they started cutting those types of benefits and amenities back because it was obviously eroding, you know, the EBITDA, which is every dollar that was there had a multiple for the owner at exit. So they were, you know, taking that approach, which again, PE, VC, they can see through a lot of that stuff. So you have to be mindful of it. But the other version of it, which I think is more practical for what we see, is there's a concept of like a business inside of a business. Yeah.
How Can You Maximize Your Business Value Before Selling? with Randy Katz Video
