Don't let "Operational Debt" kill or chop your exit
January 15, 2026
by an intermediary from Warwick Business School in Vienna, Austria
I’ve been spending a lot of time recently on the front lines of Food & Beverage and Consumer deals across the UK and Europe. If there is one thing I’ve taken away from the current deal climate, it’s this: Your exit multiple is decided 24 months before you ever sign an LOI.
Too many founders think transaction readiness is a "sprint" they start once they hire an advisor. It’s not. In this market, buyers (especially the sophisticated ones on this platform) aren't just buying your brand; they are buying the certainty of your cash flow.
If you’re looking at a 12–36 month horizon, here is the "no-filter" advice on what actually matters to get a deal across the finish line:
1. The "Lifestyle Business" Tax
If you’re still running personal expenses through the business or using "creative" accounting, you are effectively paying a tax on your exit. In the UK/EU, buyers are doing forensic-level diligence. If your books aren't institutional-grade, you’ll face a massive valuation haircut. Get a sell-side QoE done early. It’s better to find your own skeletons than let a buyer use them as leverage to re-price you at the 11th hour.
2. The "Tesco Trap" & Supply Chain Fragility
We see this constantly in F&B: 80% of revenue tied to one or two major grocers, or a single co-packer with a handshake deal. In the current macro environment, concentration is a deal-killer. Use the next two years to diversify. If you can't diversify the revenue, you must institutionalize the contracts. A buyer needs to know the business won't evaporate the day after completion.
3. Are you a Founder or a Bottleneck?
If the retail relationships and "secret sauce" live in your head, the business is worth significantly less. Buyers want a machine, not a "hero." If you haven't empowered a second-tier management team and documented your SOPs, you’re looking at a long, painful earn-out where you're stuck in the business for years post-sale. Start making yourself redundant today.
4. Clean up the Legal "Tail"
I’ve seen $50M deals stall because of messy IP rights on branding or unwritten agreements with European distributors. The UK/EU regulatory landscape is unforgiving. Conduct a pre-sale legal audit and get your data room organized now. When you can produce a document in minutes, it signals to the buyer that you’re a professional outfit. Momentum is the only thing that keeps a deal alive.
The Bottom Line: The "headline" multiples you see in the press don't happen by accident. They are the result of disciplined, proactive preparation. At Argo, we’re seeing that the gap between a 5x and an 8x multiple usually comes down to these four pillars of "hygiene."
If you’re thinking about your path to exit, let’s have a candid conversation. It’s much easier (and cheaper) to fix these gaps now while time is on our side.
you can reach my tem or I at redacted
Best,
George
Too many founders think transaction readiness is a "sprint" they start once they hire an advisor. It’s not. In this market, buyers (especially the sophisticated ones on this platform) aren't just buying your brand; they are buying the certainty of your cash flow.
If you’re looking at a 12–36 month horizon, here is the "no-filter" advice on what actually matters to get a deal across the finish line:
1. The "Lifestyle Business" Tax
If you’re still running personal expenses through the business or using "creative" accounting, you are effectively paying a tax on your exit. In the UK/EU, buyers are doing forensic-level diligence. If your books aren't institutional-grade, you’ll face a massive valuation haircut. Get a sell-side QoE done early. It’s better to find your own skeletons than let a buyer use them as leverage to re-price you at the 11th hour.
2. The "Tesco Trap" & Supply Chain Fragility
We see this constantly in F&B: 80% of revenue tied to one or two major grocers, or a single co-packer with a handshake deal. In the current macro environment, concentration is a deal-killer. Use the next two years to diversify. If you can't diversify the revenue, you must institutionalize the contracts. A buyer needs to know the business won't evaporate the day after completion.
3. Are you a Founder or a Bottleneck?
If the retail relationships and "secret sauce" live in your head, the business is worth significantly less. Buyers want a machine, not a "hero." If you haven't empowered a second-tier management team and documented your SOPs, you’re looking at a long, painful earn-out where you're stuck in the business for years post-sale. Start making yourself redundant today.
4. Clean up the Legal "Tail"
I’ve seen $50M deals stall because of messy IP rights on branding or unwritten agreements with European distributors. The UK/EU regulatory landscape is unforgiving. Conduct a pre-sale legal audit and get your data room organized now. When you can produce a document in minutes, it signals to the buyer that you’re a professional outfit. Momentum is the only thing that keeps a deal alive.
The Bottom Line: The "headline" multiples you see in the press don't happen by accident. They are the result of disciplined, proactive preparation. At Argo, we’re seeing that the gap between a 5x and an 8x multiple usually comes down to these four pillars of "hygiene."
If you’re thinking about your path to exit, let’s have a candid conversation. It’s much easier (and cheaper) to fix these gaps now while time is on our side.
you can reach my tem or I at redacted
Best,
George