Manufacturers with above-median profit margins sell for 7.2× EBITDA versus 6.3× for those below median. One home-services company raised its multiple from 3× to 4.5× by improving systems, creating $3 million in additional value.
There's evidence of how much just one of these matters. In Tagnify's first quarter data, manufacturers with above median margins sold at a median of 7.2 times. Below median margins sold at 6.3. Same size range. Nearly a full turn. And I've watched this happen outside a spreadsheet. I worked with a home services company where better systems and operations helped move the multiple from roughly 3 times to 4.5 times. That represented about $3 million in value creation— same basic business, better company, better multiple,
