This is not a pitch with your numbers pasted into it. It is the questions I ask every CEO I interview, answered by you, and then followed to their conclusion.
"Take me back three years. What was the business doing in revenue?"
"Standing there three years ago, looking forward, where did you believe you would be today?"
"And where are you? Not the forecast. Today."
The gap
"Three years from today. Where do you want this business to be?"
From here to there
"Revenue is the vanity number. On the next dollar you bring in, what actually reaches profit?"
Not sure? See typical ranges by industry
This is not your net margin. Net margin describes the average dollar across your whole business, including all your fixed overhead. This field asks about the next dollar, and your overhead does not grow with it. For most companies the next dollar is worth two to three times the average dollar.
Construction
A contractor running 22% gross margin and 6% net margin does not make 6 cents on the next dollar of revenue. The trucks, the office, and the estimator are already paid for. After the labor and materials on that specific job, roughly 15 to 20 cents reaches operating profit. The right number for this field is 15 to 20%, not 6%.
SaaS
A growing SaaS company can run a negative net margin on purpose, because sales and engineering spend is front loaded against future revenue. But the next subscription costs almost nothing to deliver. Roughly 60 to 80 cents of it reaches operating profit. The right number for this field is 60 to 80%, even though net margin is below zero.
| Industry | Net margin | This field |
|---|---|---|
| General contractor | 4–6% | 12–18% |
| Specialty trade contractor | 7–9% | 18–25% |
| E-commerce / retail | 2–6% | 8–15% |
| Staffing | 3–6% | 10–18% |
| Professional services / consulting | 8–14% | 25–40% |
| Home services | 6–10% | 18–30% |
| Food and beverage | 3–7% | 10–20% |
| Marketing / creative agency | 6–12% | 25–40% |
| IT services / MSP | 5–12% | 20–35% |
| Manufacturing | 5–9% | 15–25% |
| Distribution / wholesale | 3–6% | 8–15% |
| Transportation and logistics | 4–7% | 12–20% |
| Healthcare services | 6–12% | 18–30% |
| Software (non SaaS) | 15–25% | 50–70% |
| SaaS | Often negative | 60–80% |
If you are still unsure, take your gross margin and subtract about half. That will land close for most businesses.
"How many decisions are sitting on your desk right now that are genuinely significant? Not the noise. The ones that move the company."
"Over the next three years, what are you planning for?"
"Last one. Do you know what your company is worth today? Not what you hope. What a buyer would pay."
Not sure? See typical ranges by industry
Most owners are carrying a number from a broker, a conference, or a competitor's sale. Two things move it more than industry does: the size of your adjusted EBITDA, and how much of your revenue is recurring or concentrated in a few customers.
| Industry | Multiple |
|---|---|
| General contractor | 3–5× |
| Specialty trade contractor | 3–5× |
| E-commerce / retail | 3–5× |
| Staffing | 3–6× |
| Professional services / consulting | 3–6× |
| Home services | 4–6× |
| Food and beverage | 4–6× |
| Marketing / creative agency | 4–8× |
| IT services / MSP | 4–9× |
| Manufacturing | 5–7× |
| Distribution / wholesale | 5–7× |
| Transportation and logistics | 5–7× |
| Healthcare services | 5–9× |
| Software (non SaaS) | 6–9× |
| SaaS | 8–15× |
| Adjusted EBITDA | Where you land |
|---|---|
| Under $1M | Bottom or below |
| $1M to $3M | Bottom half |
| $3M to $10M | Middle to upper |
| Over $10M | Top or above |
In Q2 2026 the average small business sale ran 2.7 times owner earnings, while private equity backed deals in the same period averaged 7.2 times. Same year, same economy. The difference is size.
Then adjust for quality. Recurring revenue above half of total: add about one turn. One customer above 25% of revenue: subtract half a turn to a full turn. Top three customers above 40 to 50% of revenue: subtract one to two turns.
If you have been told five to eight times and you are a contractor, that is high. Construction in the lower middle market trades at three to five times.
The three year ledger
Three years, at the numbers you entered.
Three year profit impact
Enterprise value
Per dollar
The test
BizEquity data. Every member in my groups completes an enterprise value report, and we track it every year.
"I already have a board."
Good. And every one of them has a bias. They hold equity, or they are your friend, or they are family, and they are giving you the view from where they sit. This is a room of sixteen CEOs with no stake in your outcome, in a confidential setting, whose only job is to tell you the truth.
"I have been doing this twenty years. What is a group of peers going to tell me?"
Experience counts. It also has never gone stale faster than it does right now, with AI, a shifting global economy, and a workforce that does not behave the way it did five years ago. And here is the harder part. Exiting a company is a completely different skill than building one. I have been through dozens of exits with members and one of my own. If twenty years of experience were going to get you to your exit, you would already be there.
"I cannot afford a full day out of the business every month."
Then you have a bigger issue than the one we are discussing, and I would want to process that one in group. If the company cannot run for one day a month without you, that is not a scheduling problem. That is the finding.
"Of course Vistage members grow faster. They could afford it."
It has never been about the money. Any company above five million can afford this. It is about whether you are willing to spend the time, sit in a room of your peers, and be honest about what is actually happening in your business. That is the filter, and it is a real one.
Closing the gap. The share of your own miss you told me is recoverable, phased in across three years rather than assumed on day one, converted to profit at your operating margin on new revenue, not your net margin.
Decisions. Your count of significant decisions, at the value you put at stake in each, at the share you believe better input captures. This is the same way we score every issue processed in group.
Weather. Only applied if you selected a headwind, and set by default at half the published spread.
Enterprise value. The year three profit run rate at your adjusted EBITDA multiple. Shown separately, never added to the profit line, because it is only realized at a transition.
What is not counted. Retention of your leadership team, the speakers, the network, what your people learn from a CEO who is being challenged every month, and the thing members name first, which is being asked a question they were avoiding.
This is not for everyone. About one in five people I interview end up joining, and that is by design. Some are not ready. Some do not fit what the group needs. If the number above is compelling and you still do not want to sit in that room and be challenged, then it is not the number that is in the way, and we should both save the time.
Tom Cuthbert · Vistage Master Chair · San Antonio · tom@tomcuthbert.com · 210-248-7330
There are roughly 1,200 Vistage Chairs worldwide. My groups have ranked in the top twenty for a decade and are currently in the top five. Members of this community have completed more than 40 liquidity events over the past twelve years, ranging from mid eight figures to just under two billion dollars. Each of my CEO groups processed over one billion dollars in issue value in 2025.
Illustrative only, built entirely from the figures entered above. Growth comparisons reference Dun and Bradstreet analyses of Vistage member and nonmember companies. Multiple ranges reflect lower middle market benchmarks for privately held companies; your actual multiple depends on size, recurring revenue, customer concentration, and buyer type. Nothing here is a projection, a guarantee, or financial advice.