10 Data Points You Should Be Tracking if You Want to Sell Your Business Soon

Selling your company or taking on an investor means gathering a lot of data: financial data, customer data, employee data, historical data…the list goes on. Most business owners can find this information individually, but often the data is spread across multiple systems and storage devices, and the process to aggregate it all can be time consuming and overwhelming. The best way to avoid the headache is to get your data in order now, before you’re ready to sell. That way, whenever a buyer or advisor sends a request, the data is already at your fingertips and in one place. Below is a list of some data points that will likely be requested during a sale and are also useful for business owners in day-to-day operations. Note this list is not comprehensive but is meant to give a starting place for owners to start tracking their data.

#1 – Revenue and Growth Trend

This is an obvious one, but a must-have for business owners to understand. Owners must be able to articulate which products or services their revenue stems from and how each is trending over time. Often this data is used when budgeting or projecting future revenue, which is also relied upon during a sale. From a buyer perspective, there is a fundamental difference between projections based solely on historical trends and a “growing economy”, and projections backed up by data such as revenue by customer, end market, or geography.


EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and is a measure of net operating income for the company. For buyers, sustainable EBITDA is especially important, meaning EBITDA not driven by one-time projects or customers, or a temporary spike in demand, but rather EBITDA reflective of the level of business that is expected to be maintained and increased over time. As with revenue, projected or budgeted EBITDA should be supported by data.

#3 Gross Margin & EBITDA Margin

Gross margin and EBITDA margin are fundamental metrics that many owners already track. Understanding how your margins compare to other companies in your industry and factors driving year-to-year fluctuations can be critical for making business decisions. It will also help when selling your company. Buyers will assess your margins to understand how critical your products or services are to customers (i.e. pricing power), how well you’ve managed variable and fixed costs, and macro-economic factors impacting your particular industry (for example, rising material or labor costs).

#4 and #5 – Customer Retention & Revenue by Customer

This includes understanding how your business breaks down by customer and why those customers return. High retention can be driven by a few factors including subscription-based pricing models (think a video or music streaming service), a consumable product that is part of customers’ day-to-day business (think take out boxes for restaurants), or simply because you stress high service levels, thus promoting strong customer loyalty. Many buyers have a strong preference for sustainable, recurring revenue and will look closely at your customer retention (whether customers return from year to year) and revenue retention (annual spend by customer and whether it is increasing, decreasing, or remaining constant).

#6 – Customer Concentration

This data point illustrates your company’s reliance on any one customer. It can be tempting to latch on to a single customer that expects a lot of growth and put all your eggs in one basket, but it also comes with risk. If spend from that customer decreases or the customer withdraws completely, could the remaining existing customers and potential new customers absorb this loss? Would you be able to absorb overhead? While many buyers prefer to see low customer concentration (generally under 25% to 30% for any single customer), others can get comfortable with less diversification as long as they understand the relationships.

#7 – Revenue by End Market

This is straightforward and doesn’t necessarily apply to every business, but it’s important to understand how buyers view it. Depending on your business, too much exposure to any single end market can be risky for reasons similar to the customer concentration point mentioned above. If there is a market downturn in an end market, could the others absorb the loss? Certain end markets also tend to be riskier, such as oil & gas and construction, because they are cyclical in nature.

#8 – Employee Retention

Similar to customer retention, high employee retention is important for a number of reasons. Any business owner with a large employee base understands the costs associated with turnover, such as time and resources needed to hire and train new employees, not to mention client relationships that might be held by employees (such as sales reps). A strong culture and competitive wages, along with other factors, promote high employee retention. Strong employee retention can also give buyers comfort that those responsible for the company’s success to date will remain with the company to continue growth post-transaction.

#9 – Capital expenditures

Capital expenditures reflect purchases of property, plant, and equipment (“PP&E”). This is an important metric to track because it doesn’t show up on the income statement, but it still requires cash out the door. Furthermore, buyers will assess your company based on not only EBITDA, but EBITDA minus capital expenditures, to arrive at cash flow. It’s useful to break capital expenditures down by maintenance vs. growth. The former includes replacement of equipment, while the latter includes new equipment required to service a new customer, project, or implement a new service line. Understanding both maintenance and growth helps owners and buyers know what it costs to maintain the status quo vs. what it would take to implement growth plans.

#10 – Industry Specific

Each company will have industry-specific data vital for operations, winning customers, and recruitment. One example across many industries is the company’s safety record, often provided as EMOD (or experience modification). Another common statistic for many companies is the win/loss rate for quotes for new customers. For manufacturing companies, on-time delivery or quality metrics such as return rates are indicative of operations. For service-oriented companies, online reviews or other reputational metrics can affect business development and growth. Owners should evaluate the needs of their specific business, and should be prepared for buyers to ask about these metrics as well.