Getting Ready to Sell Your Business: What to Do Before You List

Matthew Delaney
Sep 29
3 min read

Selling a business is often the culmination of years—or decades—of hard work. Whether you’re planning to retire, pivot into a new venture, or simply cash out, preparing well in advance can make a massive difference in both the selling price and the smoothness of the transaction. Here are the most important steps to take when getting ready to sell your business.

Get Your Financials in Order

Buyers want clarity and confidence, and nothing builds that faster than clean, transparent financial statements.

Organize financial records: Ensure your income statements, balance sheets, and tax returns are accurate and up to date. Aim for at least three years of clean, audited (or CPA-reviewed) statements.
Separate personal from business expenses: Many owners blur the line—expensing cars, meals, or family costs. Buyers will scrutinize these, so clean them up early.
Cash flow focus: Buyers often value businesses based on cash flow (EBITDA), not revenue. Show consistent, growing cash flow wherever possible.

Strengthen Operations

The less dependent the business is on you personally, the more attractive it becomes to buyers.

Delegate and document: Build a management team that can run day-to-day operations without you. Document policies, workflows, and systems.
Customer concentration: Diversify your customer base. Heavy reliance on one or two clients is a red flag for buyers.
Recurring revenue: If possible, build contracts, subscriptions, or repeat customers into your business model.

Maximize Business Value Before the Sale

Consider strategic moves that boost value before you list.

Clean up the balance sheet: Pay down unnecessary debt, reduce obsolete inventory, and resolve outstanding disputes.
Review contracts: Make sure supplier, vendor, and lease agreements are current and transferable.
Polish your brand: Buyers are drawn to businesses with strong reputations, loyal customers, and a clear competitive edge.

Assemble Your Professional Team

Selling a business isn’t a DIY project. You’ll want the right advisors at your side:

CPA or accountant: To prepare and explain financials.
Business broker or M&A advisor: To market your business and negotiate with buyers.
Attorney: To draft and review contracts, protect your interests, and handle due diligence.
Wealth advisor: To plan what you’ll do with the sale proceeds—tax strategies, estate planning, and investments.

Understand Valuation

Know what your business is worth—realistically.

Valuation methods: Common approaches include multiples of EBITDA, revenue multiples, or asset-based valuations.
Industry comparables: Research recent sales in your industry to gauge realistic ranges.
Don’t overvalue: Owners often assume their business is worth more than the market will pay. A professional valuation can keep expectations grounded.

Prepare for Due Diligence

Buyers will comb through every detail before closing. Be ready for their questions.

Legal documents: Corporate records, contracts, leases, and intellectual property.
Employee matters: Payroll records, benefits, and employment agreements.
Litigation risks: Any pending or past lawsuits, regulatory issues, or compliance concerns.

The smoother and more transparent this process is, the faster the deal can close.

Plan Your Exit Strategy

Think beyond the sale itself.

Transition period: Many deals require you to stay on for 6–24 months to ease the transition. Be clear about how long you’re willing to stay.
Post-sale life: Will you retire, start a new venture, or shift into consulting? Knowing your “what’s next” can help shape deal terms.
Tax planning: Structure the deal (asset sale vs. stock sale) with tax efficiency in mind. Poor planning could cost you hundreds of thousands in taxes.

Start Early

The best time to prepare is 2–3 years before selling. This gives you time to clean up financials, stabilize cash flow, and increase enterprise value. Waiting until you’re burned out or in a financial bind often forces rushed decisions and a lower sale price.

Final Thoughts

Selling a business is both a financial transaction and an emotional milestone. By getting your house in order—financially, operationally, and personally—you set yourself up for a successful exit on your terms. With careful preparation and the right team of advisors, you can maximize the value of your life’s work and step confidently into your next chapter.