7 Things to Do 12 Months Before You Sell Your Business

Consider an owner who decided on Monday that he was ready to sell and wanted it listed by Friday. Then the questions start. Where were the last three years of tax returns? Why did the books show a truck the business no longer owned? Who, besides him, knew how to price a job?

He has a good business; it just isn't ready to sell. Six months later, he's still cleaning up records instead of talking to buyers.

The best time to prepare for a sale is a year before you need one.

The owner who started early

Compare that with an owner who calls a year ahead, not because she's ready to sell, but because she wants to be ready when the time comes.
Over the next twelve months, she works through a simple list:

1. Gather three years of financials and tax returns and make sure they agree with each other.

2. Separate personal and business expenses so the books show what the business really earns.

3. Document your add-backs with receipts and invoices while the details are fresh.

4. Write down your systems for pricing, scheduling, vendors, key customer contacts.

5. Train someone else who can handle daily operations.

6. Review your lease, licenses and contracts for anything that needs consent to transfer.

7. Get a realistic valuation so your expectations are grounded before you go to market.

When she lists, prospective buyers will have answers to their questions, and due diligence moves faster because there's less to untangle.

Twelve months is not a deadline

None of this requires a year; some owners can do it in less. But each item on the list usually takes longer than expected, and the work goes better when you aren't racing against a buyer's timeline.

Thinking about selling in the next year or two? Talk with TrueNorth Business Transitions now. We'll help you build a plan so you're ready when you decide to sell.