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Buyers Don’t Buy Your Expenses
What Buyers Fix in the First 90 Days
Roland Frasier
March 09, 2026
TL;DR: Buyers don’t value your current expenses, they value the profit that remains after those expenses are optimized. Vendor inefficiencies, redundant tools, and unexamined contracts often represent hidden EBITDA expansion opportunities. The more disciplined your cost structure is before a sale, the closer your valuation will be to the business’s true earning power.
Buyers Don’t Buy Your Expenses
Most founders assume buyers pay for growth.
Revenue growth
Customer growth
Market share growth
But when a serious buyer evaluates a business, they are looking at something much simpler.
Normalized EBITDA.
In other words: what the business earns once the noise is removed and that’s where most founders quietly leave money on the table.
Buyers Look for Margin Expansion
When a private equity group or strategic buyer acquires a company, they usually have a short list of things they plan to fix within the first 90 days.
Vendor contracts are almost always on that list.
Not because vendors are bad, because founders rarely renegotiate them.
Software tools accumulate, service providers stack up, insurance policies go untouched and marketing vendors renew automatically.
Over time, expenses drift upward while no one questions them.
To a buyer, that drift looks like opportunity.
Imagine two identical companies.
Both generate $3M in EBITDA.
But one company has sloppy vendor contracts, duplicated SaaS tools, overpriced services, and outdated insurance policies.
A buyer sees something different than the founder sees.
The founder sees inefficiency. The buyer sees expandable margin.
If the buyer believes they can remove $500K of unnecessary expense after acquisition, they aren’t really buying a $3M EBITDA business.
They’re buying a $3.5M EBITDA business waiting to happen and they price the deal accordingly.
Why Buyers Improve Margins So Quickly
Many founders feel frustrated when they sell a company and watch the buyer improve profitability within a year.
It can feel like the buyer discovered something brilliant.
Usually they didn’t.
They just did the cleanup the founder never prioritized.
Vendor renegotiations
Cost consolidation
Service rationalization
Contract restructuring
These are not sophisticated strategies.
They are simply easier to do when you are looking at the business as an investor instead of an operator.
The Off-the-Org-Chart Perspective
This is one of the subtle shifts that happens when founders move from operator to owner.
Operators think about revenue. Owners think about structure.
Because structure determines optionality.
A business with clean contracts, efficient vendor stacks, and disciplined cost architecture is easier to scale, easier to operate, and easier to sell.
Buyers recognize that immediately.
The Real Lesson
Buyers don’t buy your expenses. They buy what the business will earn after those expenses are optimized.
Which means every unnecessary dollar of spend quietly reduces the value of your company.
Or put differently:
The margin you ignore today is the margin a buyer will claim tomorrow.
— Roland
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“Always counter lower” is terrible negotiation advice.
Sometimes the asking price is fair. Sometimes it’s actually cheap.
I’ve watched buyers lose great opportunities because they needed to feel like they “won” the negotiation. Meanwhile, someone else recognized the value and closed the deal.
Smart negotiation isn’t about forcing the price down every time. It’s about knowing when you’ve found something worth paying for.
Want to see when negotiating harder actually costs you the deal? Watch the video below.
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