You Can’t Sell the Future If You Haven’t Built the Present

Hey, it’s David

Welcome back to M&A from the Plane, quick stories and insights drawn from the many miles I log in the air talking to business owners, founders, and dealmakers.

We recently met with a business owner who was ready to sell. Even better, we had a potential buyer lined up.

But when the conversation turned to valuation… things fell apart.

Filed for Takeoff… With No Fuel in the Tank

Not long ago, I boarded a flight that looked like it was ready to roll. Gate agents were smiling. Passengers were buckled in. The flight crew gave the all-clear.

Then… nothing.

Ten minutes later, the captain came on:

“We’re still waiting on final fueling. Won’t be long.”

We were prepped for takeoff, but they hadn’t even fueled the plane.

That’s exactly what this next deal felt like. A business owner with big plans, a confident tone, and a valuation based on where he wanted to go… not where he was.

The Valuation Was Based on a Forecast, Not a Foundation

During a site visit to the seller, the buyer asked a fair question:

“Why are you valuing your company as if it’s already hit your 36 month future targets, when there’s no earnings today?”

The response?

“Because we hit our projections once… so we expect to hit these too.”

That’s not a valuation strategy. That’s a hope strategy.

Needless to say, the buyer walked…

No Track Record, No Deal… Yet

Here’s the reality: buyers don’t pay for what might happen. They pay for what is happening and what’s been proven over time.

Forecasts can be helpful. But they’re not a substitute for fundamentals: revenue, margin, cash flow, operations.

If you haven’t built the present, you can’t sell the future. At least not to a serious buyer.

The Bottom Line

There’s nothing wrong with ambition, it drives growth. But valuation is rooted in reality.

If you’re thinking about an exit and your best case is three years out, the real question isn’t “what’s my business worth?”

It’s “what do I need to build today to make that valuation real?”

Want help answering that?

Let’s talk, we help owners build to sell, not just dream to sell.

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Thank you!

David