Preparing Your Business for Sale

Article

06.18.2025

Selling your business is one of the most significant decisions you'll make as an entrepreneur. Whether you’re planning to retire, pursue a new opportunity, or simply step away, preparing your business for sale is essential to maximize value and ensure a smooth transition. Done right, the sale of your business can be a rewarding milestone. Done hastily or without preparation, it can leave money on the table—or worse, result in a failed transaction.

Here’s a strategic guide to help you get your business in prime shape before going to the market.

1. Plan Early

Ideally, begin preparing 12–24 months before listing your business. Even if you aren’t thinking of selling for another 5 years, it’s never too soon to begin the discussion with your advisors.

Why? Buyers want a business with a demonstrated track record of profitability and operational stability. Early preparation gives you time to clean up financials, resolve legal or operational issues, and make your business more attractive to buyers.

2. Determine the Value of Your Business

Don't guess what your business is worth. Engage a professional for a valuation to understand market value and what drives it.

Valuation factors typically include:

Revenue and profit trends
Customer base and retention
Industry and market conditions
Growth potential
Dependency on the owner

3. Get Your Financials in Order

Your financials are the first thing buyers (and their advisors) will scrutinize. Ensure they are accurate, transparent, and up to date.

Hire a CPA: A clean set of reviewed or audited financials inspires confidence.
Separate personal and business expenses.
Provide at least 3 years of financial statements.
Normalize earnings (adjust for one-time or non-recurring expenses).

4. Document Your Operations

Buyers want to know your business can thrive without you. Systematize your operations:

Create or update Standard Operating Procedures (SOPs).
Document key roles, responsibilities, and workflows.
Identify critical staff and outline succession plans.

5. Reduce Owner Dependence

If your business revolves around your personal relationships, knowledge, or involvement, that’s a risk for buyers.

Start transitioning responsibilities to your team. Build a leadership structure that shows the business can succeed without you.

6. Address and Resolve Legal and Compliance Issues

Ensure all licenses, permits, contracts, and employee agreements are up to date and in order.

Review any pending legal issues or liabilities.
Ensure intellectual property is protected and properly documented.
Organize key contracts with customers, vendors, and employees.

7. Boost Business Performance

Now is the time to strengthen your business' performance. A business that shows improving financials will attract more buyers and better offers.

Increase recurring revenue where possible.
Reduce customer concentration.
Optimize cash flow and margins.

8. Engage the Right Advisors

Selling a business involves many moving parts. A professional team can make the process more efficient—and more profitable.

Consider:

A business broker or M&A advisor
A corporate attorney
A CPA or tax advisor
A financial planner (especially for post-sale planning)

9. Prepare for (and understand!) Due Diligence

Expect buyers to do a deep dive into every aspect of your business. When I advise sellers, I tell them to be ready to disclose everything (provided a Non-Disclosure Agreement is in place). The more organized and transparent you are, the smoother the process.

Buyers will typically start their diligence by requesting such items as:

Financial statements
Tax returns
Employee and vendor contracts
Lease agreements
Operating procedures and documentation

10. Identify Your Post-Sale Goals

Finally, define your personal goals. Do you want an all-cash exit? Are you open to staying on during a transition? Do you want to sell to a strategic buyer, competitor, or private equity?

Understanding your ideal outcome helps guide negotiations and advisor strategy.

Summary

Preparing your business for sale isn’t just about boosting valuation, it’s about making the business more stable, efficient, and appealing to buyers. Even if you’re not planning to sell right away, these steps can enhance the health and scalability of your business.

Thinking of selling your business in the next few years? Bricker Graydon’s Corporate Services Practice Group is ready to assist. Start preparing today, you'll thank yourself later.