Preparing Your Business for Sale: A Complete Seller's Guide
- Katie Tibbetts
- Jun 2
- 3 min read
Why Preparation Makes or Breaks a Deal
Selling a business isn’t just about listing it and hoping for the best offer, it’s a process that rewards preparation. Whether you’re exiting due to retirement, market timing, or new opportunities, getting your house in order increases valuation, shortens timelines, and reduces the risk of deal failure.
In this guide, we’ll walk you through the five essential steps to prepare your business for sale, ensuring you present a strong, credible, and attractive proposition to potential buyers.
Clean Up Your Financials
Why it matters:
Buyers need to trust the numbers before they’ll write a cheque. Financial due diligence is typically the first and most scrutinized step in the process.
What to do:
Reconcile all statements for the past 2–3 years
Normalize earnings (adjust for one-off expenses or owner compensation)
Prepare monthly financials (P&L, balance sheet, cash flow)
Ensure tax filings are accurate and up-to-date
Get a third-party accountant to review or audit your books
Tip: If your numbers are messy, consider delaying the sale until they’re cleaned up.
Get Your Team and Systems Ready
Why it matters:
Buyers want to know the business can operate without you. The more you’ve built systems and a self-sufficient team, the more valuable and scalable your business appears.
Key steps:
Document key processes and SOPs
Clarify job roles and responsibilities
Ensure employment contracts and benefits are formalized
Identify and lock in key personnel with retention plans
Review your tech stack, are your systems secure, scalable, and current?
Tidy Up Legal and Compliance Issues
Why it matters:
Legal red flags can kill a deal late in the game. Cleaning up loose ends now avoids panic during diligence.
What to review:
Corporate structure and shareholder agreements
IP ownership and trademark filings
Key contracts: suppliers, customers, partners
Employment agreements and HR policies
Any pending or historical litigation or disputes
Pro tip: Involve your lawyer early to get ahead of potential deal breakers.
Build a Professional Data Room
Why it matters:
A virtual data room is where due diligence happens. Having an organized, secure, and professional VDR shows buyers you’re serious and reduces back-and-forth.
What to include:
Financials (3 years)
Legal documents (corporate, contracts, IP)
HR info (team structure, contracts, benefits)
Operations and SOPs
Technology architecture and licenses
Platform suggestions: Dropbox, Google Drive, or purpose-built VDRs like DealRoom or Firmex.
Set Expectations for the Due Diligence Process
Why it matters:
Due diligence is intense and it’s where deals often stall or fall apart. Being mentally and operationally ready for this phase can make or break your exit.
Expect:
Multiple document requests over several weeks
Invasive questions about your finances, people, and contracts
Requests for customer interviews, system demos, or facility tours
Negotiations around indemnities and risk allocation
Mindset tip: Transparency and responsiveness build trust.
Start Early, Finish Strong
Even if you're 1–2 years away from a sale, now is the time to prepare. By cleaning up your financials, organizing your legal documents, and getting your team and systems in shape, you'll be well-positioned to attract the right buyers and close at the right value.
