Pick One: Sell It or Grow It

I was on a call a few weeks back with a business owner. Good operator. Built a real company. He told me he wanted to sell in the next 12 months.

Ten minutes later, same call, he's telling me about a new product line he wants to launch and a sales hire he wants to make to "really push growth this year."

I stopped him.

"Which one is it? Are you selling, or are you growing?"

He looked at me like I'd asked a trick question. I hadn't. I'd asked the only question that actually matters.

Why you can't do both

Here's the thing nobody tells you when you're running a business. You don't get to chase every good idea at once. You have to know what the business is for, right now, this year. Not five years from now. Not "eventually." Right now.

And that means picking a primary goal. One goal. The goal that every decision gets measured against.

If you're planning to sell in the next year, your primary goal is maximizing EBITDA.

If you're planning to keep building for the next five or ten years, your primary goal is probably growth.

Those are not the same thing. In fact, most of the time, they pull in opposite directions.

So what is EBITDA anyway

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It's basically a cleaned-up version of your profit. It strips out financing decisions, tax situations, and accounting entries that don't reflect actual cash performance. Buyers use it because it lets them compare businesses apples to apples, and because it's a decent proxy for how much cash the business throws off.

When someone's buying your company, they're usually paying a multiple of EBITDA. Say your EBITDA is $1.5 million and the multiple for your industry is 4x. That's a $6 million valuation. Bump EBITDA up to $2 million and now you're looking at $8 million. Same multiple, bigger number, because the input got bigger.

So if you're selling, every dollar you can push to the bottom line matters. A lot.

Why growth and EBITDA maximization don't mix

Growth costs money. That's not a bug, it's the whole point of investing in growth.

New hires before they're generating revenue. New product development before it pays off. New markets before you know if they'll work. Marketing spend that takes 12 to 18 months to show real return. All of that is cash going out the door now for a payoff later.

Every one of those moves reduces your EBITDA today. That's fine if "today" isn't when you're getting valued. But if you're planning to sell in the next 12 months, you're about to hand a buyer a business with a smaller bottom line, all because you spent the year investing in a future you won't be around to enjoy.

Think about it from the buyer's side for a second. Would you pay top dollar for a business whose owner just spent the last year burning cash on bets that haven't paid off yet? Or would you rather see two years of clean, growing, defensible profit?

That's the trade. And you can't have it both ways.

What this actually looks like in practice

Say you're selling in 12 months. That new sales hire? Maybe it waits. That product line that needs six months of R&D before it generates a dime? Maybe it waits too. Trim the discretionary spending you've been carrying out of habit, not necessity. Tighten operations. Collect on receivables faster. Every one of those moves puts a little more money on the bottom line, and a little more money in your pocket at close.

Say you're not selling, you're building. Then EBITDA this quarter is not the scoreboard. Market position is. Customer acquisition is. Whether the thing you're building actually works is. You should be comfortable with a flatter bottom line if it's buying you a stronger business three years out.

The mistake isn't wanting both eventually. Growth now, sell later, that's a completely normal sequence. The mistake is trying to run both plays in the same 12 months and wondering why nothing feels like it's working.

The question you actually need to answer

Before you make another spending decision, another hire, another investment, ask yourself what the primary goal of the business is this year. Not this decade. This year.

If you can't answer that clearly, every decision you make is a coin flip.

If you're not sure which one you're actually running toward, that's worth a real conversation. Happy to talk it through with you.