As a CPA who works closely with business owners across a variety of industries, I’ve seen firsthand what separates thriving companies from those that struggle to stay afloat—or worse, never grow beyond the early stages. Whether you’re just getting started with a side hustle or have been running a company for years, building long-term value in your business should be one of your top priorities. It’s not just about increasing revenue—it’s about making strategic decisions that create a sustainable, sellable, and scalable company. In this post, I’ll share key financial and operational strategies that can help you strengthen your business from the inside out, all through the lens of someone who lives and breathes numbers and business structure.
Accurate and Complete Financial Statements
A business, no matter the size, should find someone to help keep accurate financial statements. One thing I consistently notice is the lack of financial information or any sort of tracking for small startups. More and more people are adding another income stream or starting a “side gig.” Over time, one thing leads to another, and the simple “side gig” develops into a full-fledged business, leaving the owner with a significant tax issue because they did not track things accurately. Contacting an accountant and/or just keeping an up-to-date account of the business’s income and expense activity can go a long way in keeping it profitable, planning for taxes, knowing where your money is going, and eventually helping you build long-term value in your business.
Key Performance Indicators (KPIs)
When starting a company, you must learn to identify if your company is performing and growing how it should be. KPI’s can be a great tool to help with this. KPIs, such as inventory turnover, gross profit, and sales growth, can help you determine whether the company is performing up to your standards and those of companies in a similar line of work. All companies have different KPI’s they should be tracking internally, but if you can identify these KPI’s early, it can help you grow the value of your business.
EBITDA
EBITDA is short for earnings before interest, taxes, depreciation, and amortization. In other words, how profitable your business is before all these one-off or variable items. EBITDA is a great check for businesses to assess their profitability year after year. Some companies lose money every year, but they are profitable when looking at EBITDA. They do this because they are depreciating large amounts of assets, paying interest on loans, or they are paying large amounts of federal and state taxes. EBITDA is what buyers are looking for in a company. When preparing to sell, many buyers will use a relevant industry EBITDA multiple to estimate the market value of a business. Keeping EBITDA at a good industry level can drive the value of your business up.
Building a Business Ready to Sell
Small businesses always seem to struggle with a business being “ready to sell.” One big reason for that is because the owner is the company; without the owner of the company, the company cannot run. When starting out, this makes sense because there is a lot of initial work that the owner must do to be successful, but it does not help grow long-term value. To grow value in their business, owners need to delegate and hire good employees. The goal for small business owners should be to build the business to a point where you do not have to be there for it to run. This well-oiled machine that the owners have poured years of hard work into can run on its own. This is what buyers want; they want to invest in or purchase a business that they can then sit back and watch grow even more. This is where the true value of a business is shown.
The most valuable businesses don’t happen by accident—they’re built with intention, clear financial visibility, and a strong operational foundation. Whether you’re looking to grow, scale, or eventually sell, taking steps now to track accurate financials, monitor key performance indicators, understand your EBITDA, and reduce owner dependence can significantly boost your company’s long-term value. As a CPA, my advice is simple: treat your business like an asset from day one. With the right strategy and support, you’ll not only run a healthier business—you’ll build one worth buying.
Mack Short and his CPA related services are offered through North Point Accounting & Tax Services, LLC DBA North Point Advisor Group. Mack Short and North Point Accounting & Tax Services, LLC, a separate legal entity, are not affiliated with LPL Financial. Any opinions or views expressed by Mack Short are his own and are not those of LPL Financial.
