“Time flies” is one of the oldest cliches there is. In fact, it’s so old, it was originally written in Latin, by the Roman poet Virgil, way back in 29 BCE. And yet, after thousands of years of tempus fugit proving true, many owners will still look at a five-year exit timeline and think, “That’s plenty of time to prep for a sale.”

Half a decade can escape in a flash, especially if you’re busy chasing revenue growth. It’s crucial that you spend that precious time focusing on the right thing: building value. And that means engineering profit.

What Buyers Want (and What They Avoid)

Over the years, I’ve observed owners who base their retirement plans on little more than offhand estimates – someone tells them that with their level of success, they could be looking at a 5x multiple. Years later, they field an underwhelming series of offers.

What’s often not understood is that you can have an impressive list of branches, a fleet of trucks and award-winning top-line growth, but none of it will matter if you can’t also offer predictable and durable profit.

When prospective buyers are evaluating your company, here’s what they need to see:

• Healthy profit generation that can be sustained through easy-to-repeat processes
• Clear visibility into margin drivers

But if they see any of the following, they’ll hit the brakes so fast you’ll be able to smell the burning rubber:

• Unidentified profit leakage across the order lifecycle
• Processes that rely on tribal knowledge
• A culture that confuses busyness for productivity
• Eroding margins that are masked by growth and vulnerable to shocks

What they ultimately see will depend on whether you use the next five years wisely.

If you recognize any of those red flags in your organization, the time to act is now. Your next five years should be dedicated to building a company that looks exactly like what buyers are willing to pay a premium for.

The Real Work of Improving Your Valuation: A 5-Step Profit Playbook

Building to a strong exit is a five-step process:

1. Shift your view from revenue-first to profit-first
2. Eliminate order-level profit defects
3. Make operations repeatable
4. Make profit predictable
5. Strengthen company culture through profit

Let’s take a closer look at each one.

1. Shift Management From Revenue-First to Profit-First.

Revenue is volume; profit is value. Stop obsessing over the speedometer when you haven’t checked the fuel gauge. To change your team’s mindset:

• Talk about margin every week. Don’t wait for quarterly reports. Constant attention to detail – where profit is disappearing and how you can plug those leaks – is key to unlocking consistent profit.
• Redefine your KPIs. Don’t just focus on sheer sales activity. Zoom in on profit per order and customer.
• Incentivize behavior accordingly. Stop rewarding people for closing sales at all costs, because those costs add up. Instead, push them to pursue profit on every single order.

2. Reduce Order-Level Profit Defects.

Speaking of orders, did you know that on average 35%-40% of all orders in this industry have profit defects? It’s death by a thousand paper cuts, and if you don’t catch those defects quickly, you can say RIP to that 5x multiple. Put each order under the microscope and start looking for:

• Price overrides
• Cost increases that weren’t passed through
• Missed or incorrectly applied freight
• Incorrect margin targets

Orders are the atomic unit of value, and you can’t fully understand the effect each order has on profit if you only look at aggregates.

3. Make Operations Repeatable.

Firefighting may make you look good in the moment, but buyers aren’t interested in a one-hit wonder. They are buying a reliable machine. When they look under the hood, they want to see an engine built to last, not one that requires a heroic effort every quarter just to turn over.

Potential acquirers also dislike companies that lean on tribal knowledge and unwritten processes. If they hear someone say, “Well, only Mary knows how to do that,” they’ll think, So what happens when Mary leaves? If you look back at the best sports dynasties, you’ll see plenty of roster turnover from year to year. What made their success sustainable were the playbooks that new players could fit into. Over the next five years, develop:

• Standardized workflows that any good new hire can pick up quickly
• Firm pricing discipline guidelines that are comprehensively documented and consistently enforced
• Technology-enabled guardrails to prevent the errors that lead to profit leakage
• A reduced dependency on the founder. They’re buying the company, not you.

These will decrease buyer risk, which in turn increases the odds of a stronger multiple.

4. Make Profit Predictable.

You don’t want your profitability line graph to look like a mountain range. Bountiful quarters are less impressive when they’re often followed by fallow ones. Again, it’s about reducing risk for the buyer.

To make your profit healthier, more sustainable and more predictable, take these actions:

• Improve visibility by customer, order and SKU. It’s hard to stay profitable when you don’t have enough information about how that profit is being generated. Make sure your team can always see which customers are taking up too many resources and where pricing inconsistencies are happening.
• Track churn risk proactively. It’s good to know who your A customers are. It’s even better to anticipate which are at risk of jumping to a competitor. If a profitable customer that used to make large orders every couple of weeks is now making smaller orders every couple of months, you need to address them before their orders dwindle to zero.
• Reduce surprise margin compression. Keep a closer eye on the cost to serve for each customer and make any necessary changes before it affects your profitability.

5. Strengthen Culture Through Profit

I’ve been talking so much about how profit improves your valuation that I haven’t even touched on the most important thing that profit can buy: freedom. With greater profit comes a greater freedom to invest in your people, your community, and your legacy. Profitable companies can pay better, which means lower turnover, more continuity and a tight-knit, high-morale team. When the people in your organization are happy and easy to work with, customers tend to stay loyal, even as you make changes to improve your margin.

Aiming for Freedom – and No Regrets

Profit buys you the freedom to fulfill your vision for your company. And the valuation a profitable company can fetch will buy you the freedom to have the retirement you’re dreaming of. It all starts by asking the right question: It’s not “How do I grow sales before I sell?” It’s “How do I make this business so profitable and predictable that buyers compete for it?” Then you can start building a business defined not by how much it moves, but by how much it earns.

Five years from now, you don’t want to be filled with regret, staring at a discounted valuation, or worse, a forced transition. You want buyers elbowing each other out of the way to give you great options. You want financial independence. And you want the freedom to choose your next chapter. Profit, not revenue, is how you get there.

More from author Mike Biwer: Do You Really Need to Move On From Your Legacy ERP? (April 2026)