Business valuation is as much about communication as it is about calculation. You can run the numbers six different ways—EBITDA, net profit, gross profit, recurring revenue, balance sheet value—but if you don’t present the result in the language the seller understands, you risk hitting a wall.
Too many buyers make this mistake. They do the maths right, but pitch it wrong. The result? Confusion, mistrust, and a harder negotiation than necessary.
Why Language Matters in Valuation
Different industries think in different terms.
Manufacturing and engineering: buyers and sellers talk EBITDA multiples.
Accounting firms: they think in recurring revenue multiples.
Software companies: they care about growth and retention, often ignoring profitability entirely.
If you walk into an accounting firm negotiation talking about EBITDA, the seller may nod politely but they’ll be translating your numbers into recurring revenue terms in their head. That slows the conversation and creates doubt.
The point isn’t which formula you use. The point is presenting it in the terms the seller is used to.
Same Number, Different Dialect
Here’s the secret: whichever method you use, you usually end up at the same bottom-line value.
Example:
Seller wants £1m.
In EBITDA terms: £200k EBITDA × 5× multiple = £1m.
In recurring revenue terms: £800k recurring × 1.25× = £1m.
It’s the same deal, just expressed in different dialects. Presenting it in the seller’s preferred terms makes the offer feel familiar and credible.
How to Work Out What Language to Use
The simplest way is to listen. Early in discussions, probe the seller about how they think about value:
“How have you thought about valuing your business?”
“What do you feel is the best indicator of its strength?”
If they mention EBITDA, speak EBITDA. If they talk recurring revenue, mirror that. If they reference multiples they’ve read in industry press, align your language with those.
This isn’t manipulation—it’s translation. You’re making sure both sides are talking about the same thing without unnecessary friction.
Case Example: Lost in Translation
I once saw a buyer offer “3× EBITDA” to an accountant who only thought in recurring revenue. The seller froze. They didn’t understand the offer in their own terms. They had to stop, translate it in their head, and the pause created uncertainty.
Had the buyer simply said “1× recurring revenue,” the offer would have landed instantly. Same value, different presentation. Instead, the deal stalled.
Why It Builds Trust
Speaking the seller’s language does two things:
It shows respect. You’ve taken time to understand how their industry frames value.
It builds confidence. The seller feels like you’re on the same page, not talking past them.
That trust can be the difference between a deal closing smoothly and negotiations dragging for months.
When to Switch Languages
Sometimes you’ll need to translate mid-negotiation. If the seller is clinging to a recurring revenue multiple but the accounts are messy, you may need to show them how EBITDA produces the same figure. Or if they insist on a high EBITDA multiple, you can cross-check with recurring revenue to demonstrate consistency.
The skill is switching languages without undermining credibility. Think of it like speaking French in Paris, then switching to English when you need to explain something more technical. The seller feels understood, and you stay in control.
The Psychology of Familiar Numbers
Humans trust what feels familiar. If a seller has spent 20 years hearing their peers talk about “1× recurring revenue,” that’s the anchor in their head. Throwing EBITDA multiples at them feels foreign, even if the maths is identical.
Your job as a buyer is to reduce friction. Familiar language does that. It doesn’t change the deal—it changes the seller’s comfort level. And comfort is what gets signatures on SPAs.
Practical Tips for Buyers
Research the industry standard. Know whether the sector typically talks EBITDA, revenue, or something else.
Probe the seller. Ask how they’ve thought about value—let them reveal their framework.
Translate your offer. Whatever method you’ve used, present it in the seller’s language.
Be ready to switch. If challenged, translate back into your framework to show consistency.
Stay consistent underneath. Behind the scenes, always use your neutral method (EBITDA × multiple + assets – liabilities). The translation is for presentation, not calculation.
The Bottom Line
Valuation is universal. Whether you calculate with EBITDA, revenue, or balance sheet, you end up with the same number. But negotiation is local. Each industry—and each seller—has its own dialect.
Speak their language, and you’ll make deals smoother, faster, and more credible. Force them to translate, and you risk creating friction and mistrust.
Remember: the goal isn’t to win a maths competition. It’s to close a deal. And deals close when both sides feel understood.
Call to Action
At OnPoint Accounting, we don’t just crunch numbers—we translate them. Our valuation reports are tailored to your industry and presented in the terms that sellers understand, giving you credibility and leverage.
👉 Looking to buy in a sector you don’t fully “speak”? Contact OnPoint Accounting today and let us help you bridge the gap.
Please seek professional advice and guidance when considering implementing the content of this blog, and always advise the seller to seek independent advice.
To learn more about the financial due diligence process in buying a business, why not purchase the book “Buying a Business The Smart Way” By Johann Goree: https://amzn.eu/d/0anwcVBk
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