Maximize company valuations through frictionless cost reduction

TL;DR

• Reducing payment processing expenses with the existing provider can improve profitability. Sustainable net savings may support valuation, subject to buyer diligence and the agreed earnings multiple.
• By partnering with VeriFee, business brokers can reinforce their value by helping clients command a higher sale price that offsets their own fees.

In competitive mergers and acquisitions (M&A) markets, successful business brokers recognize that selling a business goes beyond just finding a buyer. Experienced brokers play a crucial role in helping their clients reduce expenses and maximize company valuations. While M&A volume declined from its pandemic-era highs, the second half of 2024 saw a sharp rebound in transactions. The original 2025 optimism reflected expectations about policy, interest rates and dealmaking. This historical outlook should not be read as a current market forecast. With such intense pressure on business owners to optimize their businesses for sale, brokers need to differentiate their offerings, bring added value and, ultimately, help clients command a higher sale price.

Payment processing cost optimization is a proven way to enhance profitability, but traditionally, it has been overlooked due to sensitivities around long-standing processor relationships, often tied to banking services, treasury management or credit lines. Many companies hesitate to even address the topic, fearing potential disruptions or unintended consequences. Adding to the challenge, deep technical integrations with hardware, software and eCommerce platforms often create the perception that cost reductions require switching providers, purchasing new equipment or dedicating significant resources to implementation.

VeriFee disrupts traditional models, empowering business brokers to help their clients achieve frictionless cost reductions, typically while retaining the existing processor and systems. A statement review, authorization and some client coordination are still required. Results and implementation needs depend on the account.

The math tells the story: VeriFee helps companies benefit from lower payment processing fees which directly impacts their bottom line, increasing valuation and brokerage commission while offsetting the cost of brokerage services.

Let’s look more closely at how this can play out.

Average Business sale Prices and Valuation Multiples

Business sale prices and valuation multiples vary widely based on size, industry and profitability metrics. EBITDA, cash flow and seller’s discretionary earnings (SDE) are different measures and their multiples are not interchangeable.

The following industry snapshot presents historical illustrative ranges.

*Ranges for SMBs or small and medium-sized businesses, vary greatly based on company size, growth, market conditions and other qualitative factors.

**SDE or seller’s discretionary earnings, is often used for smaller businesses. EBITDA is more common for larger, more established entities.

Sources: BizBuySell Insight Report, IBBA Market Pulse, DealStats by BVR

Savings Impact on Valuation

Let’s consider a company generating $10 million in annual revenue. They take your recommendation to partner with VeriFee to reduce their credit card and related payment processing expenses. The total savings equates to 0.5% of annual revenue or $50,000.

Now, let’s assume the business is in a high-multiple industry, like tech and is currently valued at 10x EBITDA. Here’s what that savings would translate to:

• Example: 0.5% of annual revenue × $10 million annual revenue = $50,000 gross annual expense reduction. If all $50,000 is sustainable, net additional EBITDA accepted by the buyer, a hypothetical 10x multiple implies $500,000 additional enterprise value. The $10 million is revenue, not the company’s current value.

In this scenario, the modeled enterprise-value increase is $500,000. This is not an actual client result or a guaranteed sale-price increase. Deduct gain-share fees and ongoing costs before applying a multiple to net earnings.

Even a small 0.5% expense reduction can have an outsized impact on a company’s valuation and ultimate sale price, even in industries where businesses are valued using smaller multiples. Delivering that kind of value to your clients through a relatively small cost reduction is an incredible differentiator in a competitive market.

Offsetting Broker Fees and Enhancing Broker Value

If sustainable net savings support a higher agreed sale price, a percentage-based success fee may increase. This depends on the broker’s negotiated fee base and schedule, not merely on an estimated valuation. An added benefit of partnering with VeriFee, for business brokers and clients alike, is increased profit, which is the ultimate goal for any business, after all. By helping businesses save money in the short term, which offsets broker fees and increases their eventual exit value in the long term, brokerages provide an invaluable service that will help them stand out in a competitive marketplace.

Typical Brokerage Commissions

Commissions, minimum fees, retainers, tiered schedules and what constitutes the fee base are negotiated.

Illustratively, $50,000 in accepted net annual savings at a 4x–10x multiple implies $200,000–$500,000 in additional enterprise value. If all of that becomes additional fee-bearing sale consideration, a 10% success fee would increase by $20,000–$50,000. The fee agreement and completed transaction determine the actual result. This makes brokerage fees easier to justify while increasing client profitability.

Benefits for Clients

From the client’s perspective, increasing company valuation through frictionless cost reduction justifies the expense of working with a broker.

Let’s go back to our hypothetical $10 million tech company above.

• A gross annual cost reduction of 0.5% of $10 million revenue is $50,000. Net retained savings depend on advisory fees, gain-share terms and any ongoing implementation or monitoring costs.
• If the full $50,000 is net sustainable additional EBITDA and a buyer accepts the same 10x multiple, the modeled enterprise-value increment is $500,000. Equity proceeds also depend on debt, cash, working capital and the deal structure.
• Revenue alone does not establish sale value. A 5% fee on the incremental $500,000 sale consideration would be $25,000, leaving $475,000 of that increment before taxes and other costs. Whether it offsets the entire brokerage fee requires the actual total sale price and fee agreement.

Benefits for Brokers

The benefits of partnering with VeriFee go beyond a single deal’s economics. The partnership may enhance the broker’s overall value proposition and brand reputation by providing a host of benefits. Some of these benefits may include the following:

• Offset Brokerage Fees: Additional sale proceeds may help offset brokerage fees. Compare the actual fee schedule with net incremental proceeds rather than assuming full fee coverage.
• Effortless Cost Reduction for Clients: A business broker’s cost reduction can help with client retention, increasing the likelihood that they will work with you again. After all, many entrepreneurs sell multiple companies and if you’re in the business of reducing their costs by increasing their valuation, that’s a great way to build trust.
• Differentiation in a Crowded Market: Offering a direct cost optimization solution positions you as a strategic advisor who brings innovative resources, not just deal-making expertise. Connecting clients with a tool like VeriFee, which not only saves them money but offsets the expense of working with you, is a unique differentiator.
• Higher Client Satisfaction and Referrals: When clients see measurable improvements in their sale price and net proceeds, they’re more likely to recommend the brokerage to peers, fueling a virtuous cycle of referrals. The ability to point to specific savings or valuation increases can enhance your credibility and attract more clients to your brokerage.
• Improved Deal Closure Rates: Enhanced valuations and profitability can attract more buyers, especially once you’ve built a track record of successful client deals. More interested buyers lead to smoother negotiations and potentially faster closings, beneficial outcomes for both clients and brokers.
• Long-Term Partnership Opportunities: Establishing a referral relationship or formal partnership with VeriFee can yield ongoing benefits across multiple transactions, reinforcing your role as a value-added partner in the M&A process.

A Frictionless Cost Reduction

One of VeriFee’s greatest benefits is its simplicity. Almost every client stays with their existing processor. The aim is to reduce avoidable costs without replacing essential systems. Any specific process changes or implementation requirements should be agreed before proceeding. All it takes to get started is a review of a credit card processing statement.

Moreover, VeriFee works on a gain-share model which ensures that all our partnerships are truly aligned with client interests. The standard savings-split engagement has no upfront fee and compensation depends on the agreed savings arrangement. A review and client coordination take time. Savings and valuation outcomes are not risk-free or guaranteed. Monitoring during the engagement and any nominal ongoing monitoring fee afterward are subject to the agreed terms. Custom advisory is separately contracted.

Encourage Clients to Start Saving Today

By partnering with VeriFee, business brokers can connect clients with a value-added solution that reduces payment processing fees, boosts bottom-line profits and enhances valuations. With a significant valuation increase, both businesses and brokers stand to earn more money, while the broker also gets the benefit of another satisfied customer likely to refer their services. And that’s a scenario that benefits all parties involved.

Don’t let your clients leave money on the table. Encourage them to explore frictionless cost reduction with VeriFee and get ready to maximize the value of your next deal.

Disclaimer: Valuation multiples, fee structures and average sale prices vary widely depending on market conditions, business characteristics and geographic region. The data and ranges presented here serve as a general guide.