Tester Firm
Strategic Advisory Excellence Since 1984
Executive Dashboard
Strategic Outlook 2026–2028
$4,000,000
Annual Gross Revenue
6.25%
EBITDA Margin
$3,000,000 - $4,800,000
Valuation Range
25%
Economic Profit%
3
No. of Equity Partners
$133/hr
Avg Client Rate ($/hr)
20
Total Employees
75%
Overhead as % of Revenue
Valuation-Based Strategic Position
Strengths, Weaknesses, Opportunities, Threats
Strengths
  • The firm generates $4.0 million of gross revenue, which provides meaningful scale for a buyer’s valuation analysis.
  • With 30,000 billable hours, the practice shows substantial production capacity and measurable operating volume.
  • EBOC is 25%, giving a clear indicator of operating profitability for valuation purposes.
  • Revenue per partner is $1.33 million, suggesting strong partner-level revenue production relative to the three-partner structure.
  • The firm has 20 staff supporting 3 partners, indicating a leveraged staffing model that can support delivery capacity.
Weaknesses
  • EBOC of 25% indicates only moderate earnings conversion, which can limit valuation relative to firms with stronger profitability.
  • The firm is concentrated in just 3 partners, creating meaningful key-person and succession risk at a $4.0 million revenue level.
  • All three partners are age 59, which elevates near-term transition risk and can pressure buyer confidence in continuity.
  • Revenue per partner of $1,333,333 is strong, but it also highlights a relatively small partner base supporting the entire $4.0 million revenue stream.
Opportunities
  • With only 3 partners averaging age 59, succession planning and leadership transition are a material opportunity to protect enterprise value and reduce key-person risk.
  • At $1.33 million of revenue per partner, there is room to improve partner leverage and scale by broadening the revenue base beyond the current ownership structure.
  • An EBOC margin of 25% suggests meaningful upside from operational efficiency and pricing discipline, which could expand valuation through higher profitability.
  • With 30,000 billable hours across 20 staff, the firm may be able to increase productive leverage and capacity utilization to support growth without a proportional increase in overhead.
Threats
  • All three partners are age 59, creating a near-term succession and continuity risk if ownership transition or leadership replacement is not already in place.
  • The firm’s economics are concentrated at the partner level, with 3 partners generating $4.0 million of revenue and $1.33 million of revenue per partner, which can make value more sensitive to any partner departure or reduced capacity.
  • With only 20 staff supporting 30,000 billable hours, the operating model may be stretched and could limit scalability or increase execution risk if workload rises or staffing changes.
  • EBOC margin of 25% indicates moderate profitability, leaving less cushion than a higher-margin firm to absorb compensation pressure, overhead increases, or transition costs.
Enhance Profitability

Improving EBITDA margin from 6.25% to 25% could increase firm value by 50-100%.

6.25% EBITDA margin
Operational Efficiency

You are doing a great job on leverage, continue to look for opportunities to push work down to the appropriate levels, and remember that leverage is your biggest pathway to high levels of profitability

Leverage ratio 6.67:1
Revenue Acceleration

Growing revenue above $5M increases base multiples from 4-5x to 5.5-7.5x, potentially adding 30-50% to firm value.

Risk Mitigation

May enhance operational capacity, diversify expertise, and strengthen continuity, but can introduce complexity in decision-making and profit sharing.
Proactive succession planning can prevent future multiple reductions and maintain firm value.

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This preliminary valuation range is for discussion purposes only, based on unverified information, and is highly sensitive to assumptions. It does not constitute a formal valuation or transaction guidance and should not be relied upon by any party for decision-making purposes.