Good Businesses Sell Better: My Conversation with John Martinka
- Mark Hartmann, MBA
- Jul 14
- 7 min read
Some podcast hosts read questions.
Others understand the subject well enough to have an actual conversation.
John Martinka is firmly in the second category.
I recently joined John on Getting the Deal Done for a lively discussion about what makes a business attractive to buyers, why some companies are easier to sell than others, and what owners can do now to improve their eventual outcome.
John has extensive experience advising business buyers and sellers, and it showed throughout the interview. He asked smart questions, challenged assumptions, added his own perspective, and kept the conversation practical.
More importantly, he did not make me spend the first 15 minutes explaining what I wanted to be when I was seven years old.
We got right into the businesses, buyers, risks, and deals.
The Best Place to Start Is With a Good Business
The episode's title is “Tips on Selling Good Businesses,” and the word “good” is important.
A talented business broker or M&A advisor can help position a company, identify qualified buyers, manage the process, create competitive tension, negotiate terms, and guide a transaction through closing.
What an advisor cannot do is instantly transform a weak business into a strong acquisition opportunity.
We cannot manufacture profitability.
We cannot make years of disorganized financial records disappear.
We cannot eliminate major customer concentration with a clever marketing brochure.
We cannot convince an experienced buyer that a business runs independently when the owner is still approving every purchase order and answering every customer call.
Good businesses sell better.
They generally attract more interest, survive greater buyer scrutiny, receive stronger offers, and have a better chance of reaching the closing table.
That may seem obvious, but many owners assume the sale process begins when they hire an intermediary. In reality, the sale process often begins years earlier, through the decisions the owner makes about profitability, management, systems, customers, employees, and financial reporting.
Buyers Are Looking for More Than Revenue
Owners often begin by asking, “What multiple are businesses like mine selling for?”
That is a reasonable question—but it is not the first question a buyer will ask.
Buyers want to understand the company’s earnings, but they also want to know how dependable those earnings are.
They will examine issues such as:
Customer concentration
Vendor concentration
Recurring versus project-based revenue
Employee turnover
Management depth
Owner involvement
Financial reporting
Competitive position
Growth opportunities
Operational systems
Two businesses may generate the same annual profit and still receive very different valuations.
One may have diversified customers, experienced managers, documented procedures, clean financial statements, and consistent year-over-year performance.
The other may depend heavily on one customer, one employee, one supplier, and an owner who has not taken a vacation since the Clinton administration.
Those are not equally valuable businesses.
Buyers pay for cash flow, but they discount for risk.
The Generational Transfer Is Creating Opportunity
For years, advisors have warned about a coming “silver tsunami” of Baby Boomer-owned businesses entering the market.
John offered a more accurate description during our discussion.
It has been less like a tsunami and more like a steady wave.
A growing number of business owners are approaching retirement and thinking about what comes next.
At the same time, younger entrepreneurs, corporate executives, private equity groups, family offices, and search fund buyers are looking to acquire established companies.
That creates a meaningful opportunity for good businesses.
But it also creates competition among sellers.
An owner should not assume that simply reaching retirement age guarantees a successful sale. Buyers will compare opportunities, evaluate risk, test the financials, and decide which businesses deserve their time and capital.
The companies that stand out will be those that are profitable, transferable, well-organized, and prepared.
Clean Financials Build Buyer Confidence
One of the most important steps an owner can take is also one of the least exciting:
Clean up the financial records.
Buyers want to understand how the company makes money, where the money goes, and whether the reported earnings can be supported.
Confusing bookkeeping creates confusion about value.
If personal expenses are mixed with business expenses, adjustments are poorly documented, financial statements do not match tax returns, or expense categories change every year, the buyer has to work harder to understand the company.
When buyers have to work harder, they become more cautious.
When they become more cautious, they often reduce their offer, increase their due diligence requirements, or walk away entirely.
Good financial reporting does not merely help the accountant. It supports the sale narrative and increases buyer confidence.
A buyer should be able to follow the numbers without needing a decoder ring.
Reduce the Risks Before Going to Market
Every business has risk.
The objective is not to create a perfectly risk-free company. That company does not exist.
The objective is to identify the risks that will concern a buyer and begin addressing them before the business is placed on the market.
Customer Concentration
A large customer can be a tremendous asset—until that customer represents 40% or 50% of the company’s revenue.
A buyer will immediately ask what happens if that customer leaves, changes suppliers, experiences financial problems, or is acquired by a larger competitor.
Reducing customer concentration takes time, so owners should not wait until due diligence to begin thinking about it.
Vendor Concentration
The same principle applies to suppliers.
If a business depends on a single vendor for a critical product, material, license, or service, the buyer will want to understand the alternatives.
Are there backup suppliers?
Are the terms documented?
Can the relationship be transferred?
Is pricing locked in?
A supplier that feels reliable to the seller may still represent significant risk to the buyer.
Key Employee Dependency
Most businesses have important employees.
The concern arises when one employee possesses nearly all the institutional knowledge, controls major customer relationships, or performs a function that no one else understands.
That individual may be excellent—but the business should not become unmarketable if they leave.
Cross-training, retention plans, documented procedures, and stronger management depth can make the company significantly more attractive.
The Business Must Be Able to Function Without the Owner
Owner dependency is one of the most common issues in privately held businesses.
Many owners have spent decades becoming indispensable. They know every customer, approve every expense, solve every problem, and make every important decision.
That may have helped build the company, but it can make the business harder to sell.
A buyer is purchasing the company's future earnings. If those earnings depend entirely on the seller's continued involvement, the buyer may question what is actually being acquired.
This is where the “kidnap test” comes into the conversation—but it does not need to be the star of the show.
The basic question is:
What happens to the business if the owner is unexpectedly unavailable?
Do employees know what to do?
Can customers still be served?
Can decisions still be made?
Can invoices still be issued and collected?
Can the company continue operating for a week, a month, or longer?
The stronger the answers, the more transferable the business becomes.
Owners can reduce dependency by delegating authority, documenting procedures, building a management team, expanding customer relationships beyond the owner, and creating accountability throughout the organization.
The goal is not to make the owner irrelevant.
The goal is to make the business valuable without requiring the owner to remain permanently attached to it.
Knowing What to Do Is Not the Same as Doing It
Most business owners understand that they should improve their financial reporting, develop their managers, document their systems, diversify their customer base, and prepare for succession.
The difficulty is execution.
Running the company consumes the owner’s time. Customer problems, employee issues, cash flow, purchasing, sales, and operations always feel more urgent than preparing for a sale that may still be several years away.
That is why outside advice and accountability can be valuable.
An experienced advisor can help identify the issues most likely to affect value, prioritize improvements, establish a realistic timeline, and keep preparation from being postponed indefinitely.
The ideal time to prepare a company for sale is not after a buyer has already submitted a due diligence request list.
By then, the buyer is measuring the problems.
The better approach is to address them while the owner still has time to create a track record of improvement.
Why I Enjoyed This Conversation
John made this episode fun because he knows the territory.
He understands how buyers evaluate opportunities, how sellers think about their companies, and why seemingly small operational issues can become major obstacles to a transaction.
He also understands that business sales involve real people—not just spreadsheets, multiples, and legal documents.
That experience allowed us to have a candid conversation rather than a scripted interview.
We discussed the opportunities in the lower-middle market, the importance of representing strong businesses, the generational transfer of privately held companies, and the practical steps owners can take to become more attractive to buyers.
John was informed, engaging, generous with his own insights, and very easy to talk with.
That is a pretty good formula for a podcast.
Thank you to John Martinka and the Getting the Deal Done team for inviting me onto the show and for producing a thoughtful conversation for business owners, buyers, and advisors.
Listen to or Watch the Full Episode
During the episode, we discuss:
What makes a business attractive to buyers
Why some businesses are easier to sell than others
The growing opportunity in the $1 million to $5 million market
How the generational transfer of businesses is unfolding
Why clean financial records matter
How buyers evaluate customer, vendor, employee, and owner dependency
Why preparation should begin well before the business goes to market
Considering selling your business—or wondering how attractive it would be to a buyer?
Contact me at mark@hartmannrhodes.com or visit HartmannRhodes.com.
You only sell your business once. Make it count.
Mark Hartmann is a former business owner turned M&A advisor—and the author of Sweat Equity Payday—who knows firsthand what it takes to build, grow, and sell a successful company. A three-time Inc. 5000 CEO honoree, he led his own eight-figure sale and now helps business owners sell companies worth $1M to $25M. Mark understands that selling a business is personal, not just financial. That’s why he works closely with owners to maximize value, protect their legacy, and transition on their terms.
He holds an MBA from Eastern University and a master's degree in organizational change management from St. Elizabeth University, as well as Certified M&A Professional (CM&AP), Certified Business Intermediary (CBI), Certified Exit Planning Advisor (CEPA), and Certified Value Builder (CVB) credentials.
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HartmannRhodes advises owners of companies typically valued between $1–$25 million. If you’d like a structured pre-sale valuation review and a readiness roadmap, we can walk you through the process and tailor it to your timeline and goals. Contact us today!
Blog: Good Businesses Sell Better: My Conversation with John Martinka