Stop Leaving Millions: Master adjusted ebitda to Win Your Exit

Trevor Stevenson-Platt

18 Dec 2025 — 4 min read

You are not selling the past—you’re selling the next three years of believable profit. That’s what the buyer is buying, and the cleanest way to show it is adjusted EBITDA. Not the number your accounting software spits out—the number that survives a buyer’s flashlight and a banker’s questions.

I watched a founder miss seven figures on price, not because the business was weak, but because the story behind the numbers was lazy. The buyer didn’t punish performance; they punished the noise. That’s the quiet power of adjusted EBITDA—it separates signal from static.

Why this matters now

When you go to market, time compresses your reputation. Years of decisions get crammed into a few PDFs and a single number that either builds trust or breaks it. Buyers don’t have weeks to sit in your office and absorb your context. They lean on adjusted EBITDA because it translates context into credible profit.

Get it wrong and you’ll pay in one of three ways: a lower price, nastier earn-outs, or a deal that dies after months of distraction. Get it right and you pull value forward—and protect it from opinion.

What buyers are really buying

Yes, buyers look at revenue and growth. But they pay for sustainable, transferable earnings. That’s why adjusted EBITDA matters. It shows what the business should earn in the buyer’s hands—without your personal quirks, one-time shocks, or old mistakes.

Think like a buyer: If I run this cleanly and sensibly, what does it throw off in cash-like earnings every year? They don’t care about your SUV, your cousin on payroll, or the brand agency that reimagined the logo. They care that customers stick, margins hold, and the cash machine hums without you.

Your job is to remove distractions that make earnings look smaller or shakier than they are. Adjusted EBITDA is a translation—from founder reality to investor reality.

normalise

Start with EBITDA: earnings before interest, taxes, depreciation, and amortisation. It’s a rough proxy for operating cash flow. Then adjust it—add back expenses that won’t continue under a sensible new owner, and normalise unusual spikes or slumps.

If a cost won’t recur, it’s an add-back. If a one-off event temporarily smashed or inflated earnings, you normalise it. The goal isn’t inflation—it’s a reflection of the business’s real earning power.

Normalise

Treat this like cleaning a lens, not painting the photo. Start early. Be precise. Document everything.

Focus on common adjustments, with receipts

Owner-related items: above-market salary, benefits, family payroll, personal travel, non-business meals, club dues
One-time events: legal settlements, a one-off consulting project, a unique cyber incident, a nonrecurring write-down
Non-cash or accounting items: stock comp in small private companies, unrealised FX, one-off inventory adjustments
Structural cleanups: duplicate software during a migration, rent overage before a lease reset, discontinued product lines

Normalise revenue and costs. If you lost a whale that won’t return, adjust down. If you landed a sticky contract that’s fully live, adjust up on a run-rate basis—but only if it’s in production, not a signed dream.

Calibrate compensation. If you pay yourself far above or below market, reset to a realistic replacement cost. The buyer will. Beat them to it.

Document every add-back. Bank statements, invoices, contracts, emails confirming one-time events, board notes, vendor quotes. If you can’t prove it in two clicks, it won’t count in the room.

Proof beats persuasion

Sophisticated buyers will run a quality of earnings review. They’re not trying to be clever—they’re trying to avoid surprises. Meet them there.

Package your adjusted EBITDA in a simple bridge. Show EBITDA from the financials, then each add-back with a one-line description, the amount, and a link to evidence. Keep it tidy. Keep it calm. Let proof talk.

Avoid the credibility killers: vague add-backs with no documents, “nonrecurring” adjustments that recur every year, and adjustments that depend on you being in the building. If the business needs your magic to earn that number, it’s not adjusted—it’s wishful.

Grow the number by changing the business, not the spreadsheet
If you have 6–18 months before a sale, strengthen adjusted EBITDA in the business itself.

Cut noise, not muscle. Kill vanity spend, duplicated tools, stale vendor contracts, underused perks. Don’t slash sales capacity or customer success that protects renewals. Buyers smell desperate cuts.
Price with courage. Smart price moves on sticky offers often drop straight to EBITDA. Test, measure, and document the lift. Buyers love auditable pricing wins.
Lock in sticky revenue. Multi-year renewals with clean terms, lower concentration, clear churn metrics. Adjusted EBITDA is worth more when the revenue behind it is durable.
Unwind owner dependence. Move key relationships and decisions to systems and managers. If your presence is required to sustain the number, the buyer will haircut it. Build a business that performs on Tuesday when you’re not there.

Make timing your ally

Three levers can move the outcome by millions.

Seasonality. Use trailing twelve months and show seasonality clearly. If Q4 is your Super Bowl, don’t go to market the week before Q3 closes.
Momentum. A rising adjusted EBITDA into a process creates confidence. If the line is flat, show the drivers that turn it up next quarter—with contracts and implementation dates, not vibes.
Working capital. Buyers watch how much cash the business needs to run. Clean up collections, standardise terms, and know your normalised working capital so price doesn’t get nicked at the eleventh hour.

Red flags to fix before you sell

Cash expenses with no paper trail
Adjustments that benefit you more than the business going forward
Big swings in gross margin with thin explanations
A messy chart of accounts that hides where money really goes

Key takeaway

Adjusted EBITDA isn’t a trick. It’s the truth, organised. Strip out the noise and show what the business earns in the buyer’s hands, and you don’t just raise the number—you reduce doubt. Less doubt means more price, cleaner terms, and a deal that closes.