Preparing Your Business for Sale: A Checklist for Maximum Value
Selling your business is one of the most important decisions you’ll ever make—and the better prepared you are, the more value you’ll get. Buyers aren’t just looking at your revenue; they’re evaluating risk, growth potential, and operational stability.
That’s why it’s essential to prepare your business well before putting it on the market. A clean, well-documented, and scalable business is far more likely to attract serious buyers and command a higher sale price.
Use this comprehensive checklist to position your business for maximum value when the time comes to sell.
✅ 1. Get Your Financials in Order
Buyers want to see accurate, transparent, and consistent financial information.
Three years of profit & loss (P&L) statements
Balance sheets and cash flow statements
Tax returns (last 3 years)
Year-to-date financials
Normalize owner compensation and personal expenses
Identify add-backs (e.g., one-time costs, non-recurring expenses)
Tip: Work with your CPA or an advisor to ensure financials are buyer-ready.
2. Understand Your True Earnings (SDE or EBITDA)
Most small and mid-sized businesses are valued based on Seller’s Discretionary Earnings (SDE) or EBITDA. Understanding and presenting your earnings properly is key to getting full credit for your business’s profitability.
Calculate SDE: Net profit + owner’s salary + non-essential expenses
Highlight recurring revenue streams and long-term contracts
Separate one-time expenses to improve perceived earnings
3. Document Your Operations
A business that runs smoothly without the owner is more attractive to buyers.
Create or update standard operating procedures (SOPs)
Document workflows, software systems, and daily processes
Outline key responsibilities for each team member
Identify areas where automation or delegation can be improved
Tip: A business that can operate without you is more scalable—and more valuable.
4. Strengthen Your Team
Buyers will assess whether your team can support the business after you exit.
Identify and retain key employees
Create management structure and delegate leadership tasks
Review employment contracts and incentives
Consider stay-on bonuses for post-sale continuity
5. Clean Up Legal & Compliance Issues
No buyer wants to inherit legal baggage. Make sure your business is clean and compliant.
Ensure business licenses, permits, and registrations are current
Review intellectual property (trademarks, patents, software rights)
Settle outstanding disputes or litigation
Organize customer and vendor contracts in writing
Ensure insurance policies are appropriate and up-to-date
6. Improve Customer & Revenue Mix
A healthy customer base signals stability and reduces perceived risk.
Diversify customer base to avoid overdependence
Highlight long-term contracts or recurring revenue
Document customer retention metrics and satisfaction scores
Review pricing strategy and margin performance
7. Boost Curb Appeal
First impressions count—both in physical appearance and online presence.
Clean, repair, and organize your physical workspace
Refresh branding and marketing materials
Update website and social media channels
Review online reviews and reputation scores
8. Prepare a Confidential Information Memorandum (CIM)
This document is the foundation of how buyers evaluate your business.
Company overview and history
Financial summary and growth trends
Products/services and competitive advantage
Market positioning and growth opportunities
Organizational chart and team bios
Tip: Work with a business broker or M&A advisor to craft a compelling CIM that showcases your business’s strengths.
9. Know Your Ideal Buyer
The right buyer brings more than just money—they bring a vision for your company’s future.
Define the type of buyer you want (strategic, private equity, individual)
Understand what they’re looking for and how to speak their language
Be open to earnouts, equity rollovers, or transitional roles if needed
10. Get a Professional Valuation
Don't guess your business’s worth—get a data-backed valuation from an expert.
Work with a broker or valuation expert
Review multiple valuation methods (SDE multiple, EBITDA, comparables)
Identify factors that can increase (or decrease) your value
Final Thoughts
Preparing your business for sale is about more than financials—it’s about reducing risk, showcasing opportunity, and creating a business that can thrive without you.
The earlier you start preparing, the more control you’ll have over the outcome—and the higher the price you’re likely to receive.
Thinking about selling in the next 1–3 years?
Let’s talk. Get a free, no-obligation business valuation and personalized exit readiness assessment.
