If you’re planning to sell your business, the time to optimize margins isn’t about squeezing every last dollar — it’s about creating stability.
Acquirers usually come with scale advantages: better vendor pricing, deeper freight discounts, and stronger operational leverage. So instead of trying to beat their margin structure, your goal is to deliver six clean quarters of stable margins, cash flow, and growth.
Here’s how to think about margin optimization in the final stretch before an exit.
Focus on Margin Stability, Not Short-Term Wins
When preparing for acquisition, it’s tempting to cut costs aggressively. But buyers aren’t looking for a hacked-together operation — they’re looking for predictability.
✅ Build a margin structure that can hold steady for 12–18 months.
✅ Avoid volatile, short-term fixes that could fall apart in due diligence.
✅ Stick with vendors and processes that you can defend.
Stable > flashy.
Understand the Acquirer’s Scale Advantage
The acquiring company likely has:
- A $50M+ parcel spend vs. your $5M
- Multi-region 3PL contracts
- Long-term supplier relationships
They’ll naturally get better pricing than you do — and they know it. Your job is not to match their costs, but to show that:
- Your margin structure is sustainable
- Your ops are clean and ready to plug in
- Your growth and cash flow trends are reliable
That’s what supports a stronger valuation.
Lock In Key Contracts Early
To truly optimize margins before an exit:
✅ Negotiate multi-quarter rates with key partners (freight, co-packers, suppliers).
✅ Avoid last-minute contract changes that spike risk.
✅ Push for predictability, not aggressive renegotiation.
This gives the acquirer confidence that what they’re buying will hold together through the close and beyond.
Don’t Introduce Volatility to Hit a Number
It’s not worth switching suppliers, changing materials, or reworking your freight strategy right before a sale just to boost margin by 1–2%. The risk isn’t worth it — and acquirers will smell it during diligence.
Instead, document margin trends, explain your choices, and focus on continuity.
Repeatable performance is what gets you paid.
Final Thought: Margin Optimization is About Trust
To optimize margins before an exit, you don’t need to reinvent your ops — you need to show that they’re under control. The best exits happen when the buyer sees:
- Clean, steady margins
- Predictable cash flow
- A low-risk path to integration
Want help preparing your ops and margin profile for acquisition?
Izba works with companies pre-exit to stabilize operations and maximize value.
Let’s talk.
