The best time to start preparing a business for sale is twelve to twenty-four months before you want the money in the bank. Almost every point of multiple a founder loses in diligence was visible, and fixable, a year earlier. This is the sequence we run with owners before taking a mandate to market.
12-24 months out: fix what buyers discount
Get the numbers diligence-ready
Move to accrual accounting if you have not already. Separate personal expenses cleanly. Reconcile inventory. Buyers do not just discount bad numbers; they discount the credibility of every other claim you make once they find one.
Start the add-back file now
Every adjustment you will claim to adjusted EBITDA needs contemporaneous evidence: invoices, contracts, board notes. For a baseline on what records a business is expected to keep, the IRS's business records guidance is a useful reference; a buyer's diligence bar sits well above it. An add-back documented in real time is accepted; the same add-back reconstructed two years later is negotiated down.
Attack concentration
Any customer above 20% of revenue, any single channel above 70%, any supplier without an alternative: each one is a price reduction waiting to be applied. You cannot fix concentration in a quarter, which is exactly why this starts now.
Make yourself replaceable
Hire or promote a second layer of leadership and move customer, supplier, and platform relationships onto the team. The question a buyer is really asking is: what happens to the profit when the founder leaves? The business should have a boring answer.
6-12 months out: build the equity story
Decide what you are selling
A business is bought for its future, not its past. Identify the two or three genuine growth levers a buyer could pull (new channels, new geographies, obvious product extensions) and make early, cheap progress on each. A growth lever with a pilot behind it is worth more than a slide about potential.
Optimise for quality of earnings, not just size
A pound of subscription or repeat revenue is worth more than a pound of one-off revenue. In the final year, deliberate mix-shift toward repeat, contracted, or subscription income raises the multiple applied to every pound of profit.
Clean the structure
Resolve open legal issues, formalise IP ownership, document key contracts, and tidy the cap table. None of this adds value; all of it prevents value from leaking during diligence.
0-6 months out: run the process properly
With the business prepared, the remaining value is created by the process itself: an anonymized approach to the right buyer list, competition on one timeline, and disciplined negotiation from LOI to close. Founders who take the first unsolicited offer routinely leave 20-30% on the table, not because the buyer is dishonest, but because nothing forced them to pay more.
The timing question
Sell on the way up. The counterintuitive part of exit timing is that the perfect moment to sell feels early: growth still strong, the next lever still visible. Waiting for one more record year usually means selling into a plateau, and buyers price the direction of travel more than the level.
What is your business actually worth?
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Get your free valuation ↗Frequently asked questions
How long does it take to prepare a business for sale?
Twelve to twenty-four months to do it properly. The heaviest items, reducing concentration and owner dependence, cannot be compressed into a quarter. The sale process itself then takes four to eight months.
Is it too late to prepare if a buyer has already approached me?
No, but your leverage is different. The right response is usually to slow down, get an independent view of value, and introduce competition rather than negotiating alone. An approach is information that the market is interested; it is rarely the best available price.
What single fix adds the most value?
For most founder-run consumer businesses: making the business run without you. Owner dependence suppresses the multiple across every category, and fixing it also fixes half of the diligence questions before they are asked.
Should I tell my team I am preparing to sell?
Usually only the senior layer, under confidentiality, and late. What the wider team sees is a company getting better run: cleaner reporting, stronger management, better margins. All of that is worth doing whether or not a sale follows.