Unlock Your Business’s Value: Operational Pitfalls That Deter Buyers (and How to Fix Them)

You've grown your business with hustle, grit, and smart decision-making. But as you start to think seriously about selling, the game changes. What once worked to grow your business won’t necessarily help you maximise its value to a buyer. In fact, many successful owners are surprised to find that certain operational habits—or the lack of clear operational systems—can quietly erode buyer confidence and cut into their valuation.

A sophisticated buyer doesn’t just look at your financials; they examine how your business runs. Can it scale? Can it operate without you? Is it resilient, efficient, and built for integration? Operational inefficiencies and hidden complexity translate directly into risk—and risk translates into a lower sale price.

So what are the biggest operational red flags that hurt your valuation? Here are five areas we commonly see holding businesses back at exit—and what to do about them.

1. Unrationalised Site Footprint: Is manufacturing profile truly strategic?

It’s common for businesses to accumulate multiple locations as they grow—especially through acquisitions or regional expansion. But by the time you're ready to sell, that network of sites might look less like a strategic footprint and more like a patchwork of inefficiency.

Buyers want operational clarity and cost control. If you’ve got overlapping facilities, underutilised locations, or inconsistent processes across sites, they’ll see complexity, cost, and risk.

Fix This: Conduct a site rationalisation analysis. Ask yourself:

• Could we consolidate without hurting service levels?

• Are we maintaining unprofitable or redundant facilities out of inertia?

• Would a buyer be better off consolidating these themselves—and factoring that cost into your valuation?

If there’s an opportunity to streamline your footprint now, do it. It makes your business leaner and easier to integrate, which buyers love.

2. Insource, Outsource, or Chaos? Unclear Make-or-Buy Decisions

Many growing businesses end up with a mixed bag of internal capabilities and outsourced services. Over time, these decisions are made reactively—not strategically—and the result is an inconsistent cost structure and supply chain.

Buyers want to understand your logic. If you’re outsourcing key functions without clear rationale, or doing too much in-house with no strategic advantage, it raises questions.

Fix This: Revisit your make-or-buy strategy:

• Are you leveraging external partners for non-core functions?

• Are there areas where in-sourcing would improve quality or cost?

• Can you clearly articulate why you made each decision?

Documenting your logic shows buyers that your cost structure and capabilities are intentional, not accidental.

3. Too Much Waste: No Lean Discipline

It’s easy for operational waste to accumulate in the background—excess inventory, redundant steps, inefficient layouts. If you’ve never gone through a lean transformation, now is the time.

Buyers love operational discipline. They’re looking for businesses that run with precision—not bloated overheads, inconsistent workflows, or ‘we’ve always done it this way’ inefficiencies.

Fix This: Begin implementing basic lean manufacturing or lean operations principles:

• Map your processes and identify non-value-added steps

• Set up visual management tools and KPIs

• Engage your team in identifying and solving bottlenecks

Even modest improvements can demonstrate that you’re actively managing efficiency—and not leaving money on the table.

4. Capital Equipment: Underinvested or Overbuilt?

Capital assets tell a story. Too little investment, and buyers worry about future maintenance costs and capability constraints. Too much investment, and they fear poor capital discipline and sunk costs in underutilised machines.

Buyers look for a well-maintained, right-sized asset base. You don’t want to be seen as under-equipped or over-engineered.

Fix This: Audit your major equipment and ask:

• Are we relying on aging assets that need replacement?

• Do we have excess capacity that’s draining ROI?

• Is our equipment aligned to our future growth strategy?

Show buyers that your capital base is in good shape and strategically aligned—not an impending cash drain.

5. Working Capital & Supply Chain: Is Your Sourcing Strategy Stuck in the Past?

Many growing businesses start with what is easiest: sourcing materials and services locally. It's quick, convenient, and allows for strong relationships and fast response times. But as the business scales, this once-logical approach can quietly become a liability—costs creep up, capacity becomes constrained, and global competition pressures your operating margins.

Buyers are looking for a mature, scalable sourcing strategy. If you’re still working with the same handful of local suppliers you started with—and haven’t evaluated global alternatives—they may question your ability to grow profitably or compete at scale.

At the same time, it’s not just about chasing the lowest cost. Shifting to a low-cost-country sourcing model without regard for quality, reliability, or flexibility is just as risky. Smart buyers will want to see that you’ve thought through the trade-offs and are executing a supply chain strategy that balances cost, risk, and customer expectations.

Fix This:

• Assess where you are on the supply chain maturity curve. Are you still reliant on legacy local suppliers out of habit, or have you actively explored global sourcing opportunities?

• Develop a clear framework for evaluating suppliers—not just on price, but on quality, lead times, and responsiveness.

• Consider a hybrid strategy: local suppliers for speed and flexibility; global partners for cost efficiency on stable, high-volume components.

• Most importantly, document your direction. What’s your long-term sourcing strategy? Are you planning to dual-source, regionalise, or centralise procurement?

Buyers will take comfort knowing you’ve moved beyond ad hoc purchasing and into strategic supply chain planning. Coupled with efforts to reduce working capital—such as optimising inventory levels, tightening receivables, and improving supplier terms—this positions your business as both operationally disciplined and financially agile.

Operational Clarity = Buyer Confidence

Just like with strategy, the key here is to move from implicit knowledge to explicit systems. You know your operations well—but a buyer doesn’t. They need to see a business that’s well-oiled, resilient, and designed to scale.

The good news? You don’t need to be perfect. But you do need to demonstrate progress, discipline, and clear intent. Fixing these five operational areas—site strategy, make-or-buy logic, lean discipline, capital investment, and working capital—can dramatically improve how buyers perceive the value (and risk) of your business.

The result? A cleaner, more confident sale—and a higher price for the company you’ve worked so hard to build.