What a Value Creation Plan Looks Like, and How to Build Your Own Before an Investor Writes It for You
Every private equity deal comes with a written account of how the investor intends to make the business more valuable before selling it, and that document, the value creation plan, sets out the investment thesis, a small number of levers that will grow EBITDA, a named owner for each lever and the quarterly milestones that show whether the plan is working. Founders who draft their own value creation plan before the investor does keep far more control over the targets, the timetable and the price.
What a value creation plan actually is
According to Bowmerge, a value creation plan in private equity is a structured operational document that defines how a PE firm will grow the EBITDA of a portfolio company during the hold period, translating the investment thesis into specific initiatives with named owners, timelines and financial targets. It covers the entire hold period, typically three to seven years, and the 100-day plan that founders tend to hear about first is usually its opening chapter rather than a separate document.
The distinction matters because a 100-day plan describes what happens immediately after the deal closes, whereas the value creation plan describes the business the investor expects to sell, which means it quietly sets the standard against which you, your leadership team and your bonus will be judged for years.
What goes into a value creation plan
The structure is more consistent than most founders expect. Dealroom describes a typical plan as setting out the investment thesis, four to seven specific value creation levers that will drive EBITDA growth, a single accountable owner per initiative, and KPIs with quarterly milestones. In practice that gives you five components:
- The investment thesis, which is one or two paragraphs explaining why this business, at this price, will be worth materially more at exit.
- The levers, which are the four to seven changes that will produce the extra profit, each sized in pounds.
- The EBITDA bridge, which walks from today's earnings to the exit figure lever by lever, so that nobody can hide a gap inside a total.
- Owners, one person per lever, because a lever owned by a committee is a lever owned by nobody.
- Milestones and KPIs, set quarterly, so that slippage shows up as a missed number in month three rather than a surprise in year two.
Why investors lean so hard on EBITDA growth
The arithmetic of private equity has changed in a way that puts operational improvement at the centre of every plan. Bain & Company found that a typical deal in the 2010s needed only 5% annual EBITDA growth to hit a 2.5x return over a five-year hold, whereas today's deals require around 10% to 12% annual EBITDA growth to generate the same return, a shift Bain calls "12 is the new 5".
Investors also cannot rely on buying cheaply and selling dear. In returns attribution, according to IB Interview Questions, EBITDA growth typically contributes 40 to 60% of total equity returns, with debt paydown and multiple expansion making up the rest, and EBITDA growth is the lever most directly under the control of the sponsor and management. That is precisely why the plan exists, and why it will be written by somebody whether or not you take part.
The commercial, delivery and operational levers investors reach for
In a technology services business the levers tend to fall into three groups, which map neatly onto how such firms actually make and lose money.
Commercial levers
These include pricing discipline, account growth, moving work from project to recurring contracts and building a sales engine that does not depend on the founder. Pricing is usually the quickest win, and Kloepfel Consulting notes that disciplined pricing measures, such as removing uncoordinated discounts, can increase operating margin by 150 to 300 basis points within six to 12 months of implementation. ReveGro goes further, reporting that in the first year commercial excellence, pricing and working capital improvement deliver two to three times more EBITDA value per pound invested than operational cost reduction in mid-market businesses below £50 million revenue.
Delivery levers
These cover utilisation, project margin, scope control and the mix of senior and junior staff on each engagement, and they are where many services firms leak profit without noticing, because the revenue line looks healthy while the margin on each project slowly erodes.
Operational levers
These include management information, decision rights, leadership hires and the removal of the founder as the routing layer for every significant decision, which investors treat as a risk to be priced. The cost of leaving that unresolved is set out in our piece on what founder dependency costs at exit.
Rule of thumb: if you cannot name the person who owns a lever and the number they will report next quarter, the lever is an aspiration, and an investor will either discount it or replace it with one of their own.
A worked example for a 40 person services firm
The following example is illustrative rather than drawn from any real business, but it uses the same structure a sponsor would use, so you can substitute your own figures line by line. Imagine a 40 person technology consultancy with £4.0m revenue, EBITDA of £400k (a 10% margin), most sales still won by the founder and utilisation that drifts with every lumpy quarter.
Investment thesis: a profitable, well-regarded consultancy whose margin is held back by inconsistent pricing and uneven utilisation, and whose growth is capped by founder-led sales, can roughly double EBITDA over three years by professionalising pricing, delivery and selling, without changing what it sells.
| Lever | Owner | Year 3 EBITDA impact |
|---|---|---|
| Opening EBITDA | £400k | |
| 1. Pricing discipline: end ad hoc discounts, annual rate review | Founder, then Head of Sales | +£60k |
| 2. Utilisation and resourcing: weekly resourcing meeting, bench targets | Delivery Director | +£150k |
| 3. Repeatable sales: grow revenue to £5.2m through a hired sales lead and account plans | Head of Sales | +£240k |
| 4. Recurring support contracts attached to project work | Delivery Director | +£50k |
| 5. Operating leadership cost: operations lead and better management information | Founder | -£90k |
| Year 3 EBITDA | £810k |
Each lever then carries quarterly milestones, so the pricing lever might show the discount policy agreed in quarter one, every renewal repriced by quarter four and average day rate reported monthly thereafter, while the sales lever tracks pipeline coverage rather than waiting for revenue to appear.
Two features of the example matter more than the totals, which are that the plan includes a cost line, because credible plans pay for the capability they need, and that the largest lever is also the riskiest, which you should say openly rather than leave an investor to discover.
Worked test: remove your largest lever entirely and recalculate. If the remaining levers still clear the growth an investor needs, your plan will survive a sceptical first meeting.
How building it first keeps you in control
A founder who arrives with a drafted plan changes the conversation, because the investor is now testing your assumptions rather than imposing theirs, and the targets that later drive earn-outs, management incentives and board scrutiny begin from your evidence. It also exposes weaknesses early enough to fix them, ideally as part of a wider exit readiness plan, rather than in the middle of due diligence when every gap becomes a price chip.
Holding periods make this more pressing still, since Bain's 2026 midyear report notes they are now running to approximately seven years, which is a long time to live with targets you did not set.
Where Vitori fits
Many founders can draft the first version of a value creation plan themselves using the structure above, and they should, whether they later work with Vitori or anyone else. Where Vitori helps is in the part that plans rarely survive without, which is delivery: the Operational Scale Framework assesses Growth, Delivery and Operations to show which levers the business can genuinely carry, and in the Operator model Vitori embeds as fractional leadership to implement the changes and stay accountable until they hold. If that would be useful, you can get in touch to talk it through, with the aim of a business that runs, and scales, without the founder in every decision.
Common questions about value creation plans
Is a value creation plan the same as a business plan?
A value creation plan is narrower than a business plan. A business plan describes the whole company and its strategy, whereas a value creation plan focuses only on the specific levers that will increase EBITDA during an investor's hold period, each with an owner, a pound value and quarterly milestones, so that progress towards the exit valuation can be measured.
Should a founder share their own value creation plan with investors before a deal?
Sharing a founder-built value creation plan during deal discussions is usually sensible, because it frames the investor's diligence around the founder's evidence and assumptions. The plan should be honest about risk, including which levers are least certain, since investors test every figure and a plan that admits its weak points tends to be trusted more than one that does not.
How many levers should a value creation plan have?
A typical value creation plan contains four to seven levers. Fewer than four often leaves the plan dependent on one large bet, while more than seven spreads leadership attention too thinly in a services firm of 20 to 60 people, where the same handful of senior managers usually ends up owning every initiative.